Rising wealth in China has undoubtedly had a positive influence on capital markets but data shows that the way some of those riches are harnessed in cornerstone investments is damaging the aftermarket performance of listed companies in Hong Kong.
Issuers with significant Chinese cornerstone backing large investors brought on board before the launch of an IPO have performed poorly compared to those with cornerstone support from global institutions such as BlackRock or Fidelity.
Market participants say this is due to a combination of factors, and primarily stems from the quality of the issuers looking to list with Chinese cornerstone support.
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