Hong Kong Exchanges and Clearing said the abnormal trading activities in the closing auction session on May 30 benefited retail investors as they bought low from the massive sell-offs by institutional investors, according to a paper submitted to the Legislative Council. HKEx introduced the new session on May 26, which extended closing by 10 minutes. Unusual trading occurred four days later when shares worth about HK$14 billion changed hands during the extended period out of the HK$86 billion turnover for the whole day. The abnormal trading activity was mainly a result of the MSCI Index review of additions, deletions and reweighing of its constituent, which could lead to HK$30 billion of fund flows from passive funds, HKEx said in a written reply to the Legislative Council. Rejecting speculation only institutional investors traded during that session, HKEx said retail investors not only participated, but they also gained from fund managers adjusting their portfolios. 'Retail-based exchange participants and investors in particular appear to have used the rebalancing and the closing auction session to enjoy the opportunity to buy low ... and sell high to the less price-sensitive institutional buyers,' HKEx said. Retail investors accounted for 10 per cent of the turnover during the session and contributed about 45 per cent of total number of orders and 30 per cent of number of trades, it said. 'Many fund managers were forced to buy during the closing auction session as we had to track the MSCI index,' Simon Yung, executive director and head of retail-listed products at BNP Paribas, a major warrant issuer. 'Retail investors do not have the same obligation and they could sell their holdings to take profit. They were the winners.' Vincent Kwan, director and general manager of Hang Seng Indexes, the compiler of the Hang Seng Index, said index fund managers usually would need to conduct the index rebalancing close to the end of the market session.