Lower Disclosure Threshold Prompts 'Treasure Hunt' For Stocks In Hong Kong

by Philip Morton, Investors Offshore.com

07 May 2003

The Hong Kong Standard revealed on Tuesday that the lowered disclosure threshold which forms part of the new Securities and Futures Ordinance has resulted in something of a 'treasure hunt' for stocks considered desirable by market gurus.

Under the terms of the updated SFO, which took effect on April 1, any investor with more than a 5% stake in a listed company must disclose that stock holding within three business days, compared to the previous requirements of 10% and five business days.

According to the HK Standard, revelations about their stakes in various local firms by influential investors such as Warren Buffett, and newly elected HKEx director and shareholder advocate, David Webb have created something of a rush on the shares of the companies in question.

The increased market transparency created by the lower disclosure threshold has been welcomed by experts such as Hong Kong Institute of Investors chairman, Ricky Tam, who observed that:

'Shareholder could no longer buy stakes in other listed companies secretly. This is positive for listed companies.'

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