Finding trouble in the footnotes

Chinese shares listed in Hong Kong have a habit of surprising investors. The latest issue is whether funds invested in high-interest deposits with Chinese banks are completely safe. The so-called H-shares are more used to reporting to the central planners than to shareholders - their workings can be mysterious. Pauline Loong reports.

Investing in Chinese securities is not for the faint-hearted. Almost every year since H-shares started reporting, sharp-eyed analysts have found worrying pieces of news tucked away in footnotes to company announcements. Last year the problem was housing reform. This year, it would appear to be bank deposits.

Two H-shares – mainland Chinese firms that are listed but not based in Hong Kong – have had trouble retrieving fixed-term deposits from well-known Chinese banks and non-bank financial institutions.

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