From shares to Snoopy toys, Hong Kong is never slow to jump on a new speculative bandwagon. So it was no surprise to see retail investors pile in at yesterday's debut of the SAR's second stock market. The large paper profits for those who bought the first batch of companies to list on the Growth Enterprise Market will only further fuel public enthusiasm for these inherently risky investments. It is a craze reminiscent of that surrounding the listing of the first H shares three years ago. This raises a risk that some of the companies now being hyped to unrealistic levels will burn ordinary investors when they come crashing back to earth, as happened with many of the China-backed listings. Like H shares, the GEM is a vital and highly welcome step forward in the development of Hong Kong's role as a regional hub. Without it, the Government would stand little chance of achieving its goal of diversifying the economy and establishing the SAR as a hi-tech base. Since such companies invariably lose money while building up their business, they cannot show the three years of profits necessary for listing on the main exchange. But this obstacle is removed by the establishment of a second board which sets no such requirement. That does not mean GEM suffers from too light regulation. If anything, the problem is the reverse with the Securities and Futures Commission refusing to ease the two-year lock-up period in which key shareholders are not allowed to sell their holdings. This has prompted some hi-tech firms to threaten to list on the United States' Nasdaq instead and could usefully be relaxed, perhaps to one year. But other requirements, such as a need to file quarterly reports, offer the security of a strong regulatory framework that is one of Hong Kong's main selling points. None of this can remove the risks involved in such start-ups. While a few may eventually achieve success, others could fail, causing investors to lose everything. That is not a problem for institutions large enough to diversify their risk across a number of companies. But retail investors ought to be more cautious. The Growth Enterprise Market may be a good development for Hong Kong but that does not make it the best place for everyone to put their savings.