SHANGHAI, March 22 The Shanghai, Shenzhen and
Hong Kong stock exchanges are coordinating supervision over
illegal trading activities as speculative Chinese money is
flowing into Hong Kong via the stock connect schemes to skirt
rules on the mainland, the official Shanghai Securities News
reported on Wednesday.
Chinese money was blamed for volatility in Hong Kong-listed
Meitu Inc, whose shares surged as much as 28 percent
on Monday, before reversing to end down 11 percent.
Meitu, most famous for its popular app that transforms
users' selfies into adorable characters, was the most-traded
stock under both the Shanghai-Hong Kong Stock Connect and the
Shenzhen-Hong Kong Stock Connect on that day, exchange data
The newspaper said speculative money from China is targeting
Meitu because the company is in a "sexy" sector, there are not
yet shorting tools against the stock in Hong Kong and the
company will soon publish earnings results.
The Shenzhen Stock Exchange has improved its supervision
system and is closely monitoring money flows under the connect
scheme in a bid to spot unusual trading behaviors, the paper
Last November, China's securities market regulator said it
had punished an investor for conducting what it called "illegal"
cross-border trading through the Shanghai-Hong Kong Stock
Connect scheme. The case was the first of its kind and involved
more than 40 million yuan ($5.8 million) in illicit gains.
(Reporting by Samuel Shen and John Ruwitch; Editing by