A 9,800% Stock Increase Exposes Hong Kong's Billionaires on Paper

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A 9,800% Stock Increase Exposes Hong Kong's Billionaires on Paper

by Robert Olsen  and Benjamin Robertson
April 18, 2017, 5:00 AM GMT+8 Updated on April 18, 2017, 1:37 PM GMT+8

They are classic Hong Kong stories: people who, in a blink, became stock-market billionaires.

But exactly what’s behind much of this wealth is something of a mystery.

Take Wong Wing-wah, who used to be a fishmonger before starting a civil engineering firm. He took his company public last year -- and its stock then soared 9,800 percent. Wong and a partner, who together own nearly all of the stock, are each now worth roughly $1 billion. Their company, Luen Wong Group Holdings Ltd., reported just $1 million in profit last year.

What’s going on? The answer lies in one of the murkiest corners of Hong Kong finance: small-cap stocks.

The Hong Kong Stock Exchange and its sibling, the Growth Enterprise Market, have become a breeding ground for paper billionaires.

More details in https://www.bloomberg.com/news/articles/...t-on-paper
Specuvestor: Asset - Business - Structure.
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