MOST investors looking to maximise their gains from the Hong Kong stock market this year should avoid small counters, investment experts claim.
The big story in the stock market this year has been the inflow of foreign money and this is likely to continue to benefit the larger companies.
Nial Gooding, head of sales at Kleinwort Benson Securities, said: 'When you have the likes of Hutchison Whampoa and HSBC doubling over the last month, why should you bother with Bing Bong Constructions? 'The big companies are where the action is.' Institutional money traditionally favours the Hang Seng Index constituents and other large stocks, leaving smaller companies high and dry in comparison.
Josephine Shaw, portfolio manager at Global Asset Management, said: 'During the past four to six weeks an inflow of funds has led to gains across the board.
'But historically the blue chips have been the main ones to benefit from that.' Cheah Cheng Hye, partner at Value Partners, said: 'Since the summer of 1990, second-liners have under-performed the index.
'There is now an overwhelming negative momentum, that is a fact and there is no way you can get around that.' Out of a total of 540 companies listed in Hong Kong, only about 40 companies can be described as blue chips.
