Hong Kong stock regulator flags more companies for share concentration

Hong Kong's Securities and Futures Commission (SFC) has significantly increased its scrutiny of companies with highly concentrated shareholding this year. As of August, the SFC had flagged 13 such cases on the Hong Kong stock exchange, a 30% rise from the previous year and a twelvefold increase compared to 2023. Market analysts interpret this heightened focus as a warning regarding potential sharp price fluctuations in small-cap stocks. For instance, the SFC noted that the controlling shareholder and 18 other shareholders of Desun Real Estate Investment Services Group collectively held 99.53% of the company's issued shares as of July 21. This trend indicates a growing concern by the regulator over concentrated ownership structures.