China’s Stock Bulls Spark a Decoupling in Market Prices

China’s Stock Bulls Spark a Decoupling in Market Prices

Shares listed on China's mainland typically trade at a premium to their counterparts in Hong Kong. But the gap is getting pretty extreme.

Shares in Luoyang Glass Co., which trade at the equivalent of $0.33 each in Hong Kong, go for more than $2.10 in Shanghai. The price of mainland-listed stock in Central China Securities Co., a brokerage, is four times its Hong Kong equivalent.

China's markets are still somewhat shut off from the wider world, so some mismatch isn't unusual. But the growing gulf is creating a strange situation where companies can simultaneously have two radically different valuations.