Trading in China Ding Yi Feng shares halted after 8,500% gain

HK regulator recently intensified scrutiny of top-performing stock

HONG KONG • A Hong Kong stock whose mysterious world-beating surge vaulted it from obscurity into multibillion-dollar investment funds was suspended by the city's securities regulator.

China Ding Yi Feng Holdings (DYF), the Hong Kong investment firm whose more than 8,500 per cent surge over the past five years bested every other stock in the MSCI All Country World Index, was halted by Hong Kong's Securities and Futures Commission (SFC) yesterday.

A DYF spokesman said she could not immediately comment.

While the SFC's reasons for halting DYF were not immediately clear, scrutiny of the company has intensified in recent months.

Hong Kong market veterans last month questioned the sustainability of the surge that turned DYF into one of the world's most expensive publicly traded companies.

The comments followed several critical reports by Chinese media on DYF chairman Sui Guangyi, a Taoist scholar who has overseen lacklustre results at DYF while touting investing skills on a par with those of Mr Warren Buffett and Mr George Soros.

DYF's surge added to a long list of extreme, unexplained stock swings in Hong Kong that have threatened to dent the city's reputation as one of the world's premier financial hubs.

The stock's suspension puts a spotlight on MSCI's decision to add DYF to its global benchmark indexes last November, a move that prompted emerging market index-tracker funds run by BlackRock, The Vanguard Group, and Northern Trust to become some of DYF's biggest shareholders.

Critics of MSCI's decision, including former Hong Kong Exchanges and Clearing director David Webb, have said the index compiler should do more to vet companies before adding them to equity gauges that serve as benchmarks for investors overseeing trillions of dollars.

MSCI, which uses quantitative criteria such as market value and trading volume to construct its global indexes, has said that the gauges are designed to represent the "investment opportunity set" without making any "subjective assessments" of constituent companies.

Bloomberg LP, the parent company of Bloomberg News, competes with MSCI and others by compiling indexes and providing analytics for stocks, bonds and commodities.

Smartac Group China Holdings, a Hong Kong-listed stock that DYF reported holding at the end of last year, tumbled 33 per cent as of yesterday morning.


A version of this article appeared in the print edition of The Straits Times on March 09, 2019, with the headline 'Trading in China Ding Yi Feng shares halted after 8,500% gain'. Print Edition | Subscribe