Winners and Losers Show the Power of Volatility

(Bloomberg) -- In what’s been a stellar rally overall for Asian equities to start the year, it hasn’t always been smooth sailing -- especially when it comes to China and Hong Kong, markets full of potential perils and rewards.

Take selfie app maker Meitu Inc. and property developer Jiayuan International Group Ltd., which with moves of more than 70 percent are some of the biggest gainers and losers of the MSCI Asia Pacific Index in 2019. Those compare with a rebound of 8.3 percent in the benchmark gauge. Jiayuan’s volatility of almost 376 percent in the past 60 days is four times higher than the next most volatile name on the list, data compiled by Bloomberg show.

Of course, these companies have their own stories. Jiayuan plummeted 81 percent in one day alone on Jan. 17 due to a margin call on stock used as collateral by its chairman. By contrast, Meitu is one of the top performers this year, doubling its share price as it rebounded from an all-time low at the end of December. It’s also the fifth-most volatile stock, with a score of 79 percent.

The reason for its surge? After a slump last year when a Chinese consumer body warned it was collecting too much data, it announced plans at the end of January to buy a stake in Leyou Technologies Holdings Ltd.’s video game unit. The stock, along with other video-related companies in China also got another lift earlier this month as Beijing published a four-year development plan to boost the sector.

Here’s a look at the rest of the Top 10:

Company60-day volatility (as of March 11)
Jiayuan 376%
Fullshare 88%
Zee Entertainment 86%
Hoshizaki 85%
Meitu79%
MMG78%
Kangmei Pharma77%
Zozo75%
Sharp72%
Anxin Trust71%

Other notable companies on the leader board include Kangmei Pharmaceutical Co., which tumbled in 2018 and revealed in late December it was the focus of a regulatory probe into suspected disclosure violations. The stock has since bounced back, joining a wider rally in Chinese stocks (its A shares are up 78 percent since a low in January).

Japan’s Zozo Inc. has rebounded 30 percent from its lowest price since 2016 hit in February after the online fashion retailer’s flashy Chief Executive Officer Yusaku Maezawa said he would take a break from Twitter. It didn’t help the shares that the company lowered its profit profit outlook earlier that month.

For his part, Maezawa has been compared with Tesla Inc.’s Elon Musk for pulling off high-profile stunts on social media such as promising to pay out 100 million yen ($897,000) to 100 people who shared one of his tweets.

At the other end of the scale is Hap Seng Consolidated Bhd, a Malaysian agricultural conglomerate. The stock has quietly soared sixfold in a seven-year winning streak since the end of 2011. In a 2016 profile, the company said its culture is not one to “shout and tell everybody how great we are.”

So it’s not all about trade talks and the global economy. Picking the right winner can be a lot trickier.

Stock-Market Summary

  • MSCI Asia Pacific Index up 1.1%
  • Japan’s Topix index up 1.5%; Nikkei 225 up 1.8%
  • Hong Kong’s Hang Seng Index up 1.5%; Hang Seng China Enterprises up 1.7%; Shanghai Composite up 1.1%; CSI 300 up 0.7%
  • Taiwan’s Taiex index up 0.9%
  • South Korea’s Kospi index up 0.9%; Kospi 200 up 1%
  • Australia’s S&P/ASX 200 little changed; New Zealand’s S&P/NZX 50 little changed
  • India’s S&P BSE Sensex Index up 1.4%; NSE Nifty 50 up 1.3%
  • Singapore’s Straits Times Index up 0.7%; Malaysia’s KLCI up 0.4%; Philippine Stock Exchange Index up 0.5%; Jakarta Composite down 0.2%; Thailand’s SET up 0.1%; Vietnam’s VN Index up 1.7%
  • S&P 500 e-mini futures up 0.2% after index closed up 1.5% in last session

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