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Chart of the day: Hong Kong stocks see more price swings

PUBLISHED : Saturday, 17 March, 2018, 8:00am
UPDATED : Saturday, 17 March, 2018, 8:00am

The Hong Kong stock market has surprisingly become more volatile than its mainland Chinese peer. The 60-day volatility on the Hang Seng Index rose to an almost two-year high this week, according to data compiled by Bloomberg. The price swing in the gauge has exceeded 1 per cent by the close on 21 days so far this year, compared with 10 days for the Shanghai Composite Index. The equity market in Hong Kong, largely believed to be relatively stable because of more institutional participation, has been more rattled by the overseas turmoil this year, including rising US Treasury yields and the risk of a looming trade war. The increased volatility can also be explained by mainland retail investors taking part in the Stock Connect programmes. In contrast, the volatility in the Shanghai index has remained mostly contained since the crash in 2015, as the regulator increases scrutiny of wrongdoings while state-backed funds take a more proactive role in ironing out wild movements.

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