Fears for stock market students
Updated: 2008-01-25 10:46
Hong Kong students are piling loans and family savings into a volatile stock market, a growing trend that worries social workers in the special administrative region.
Third-year Hong Kong University law student Ivan Lee made US$38,000 on stocks and warrants when the Hang Seng Index climbed 39 percent in 2007, but half of his gains were wiped out by a 14 percent market slide this week.
"It's a good lesson to us," Lee said, grimacing at how panic selling gripped global markets. "I'd say around four or five out of every 10 male students now bet on the stock market."
Long regarded as a harmless pastime for financial students, stock trading is becoming more widespread, according to a poll by Chinese University, which found around 10 percent of students had pumped over half their savings into the markets.
The head of Hong Kong's Polytechnic University, Poon Chung-kwong recently chastised students for "majoring in stocks, and minoring in academic studies."
He said: "For the sake of a little greed, good youths have become like diseased gamblers. Is it worth it?"
Rags-to-riches tales convince many that it is worth it.
One 22-year-old graduate was reported to have transformed his family's wealth from US$9,000 to US$448,700 in three years.
But social workers say students are racking up huge debts on credit cards to fund day trading.
"Some students have no money, so they use their student grants and loans to speculate on stocks," said Joe Tang, a social work director at the Caritas Addicted Gamblers Counselling Center.
"This reflects that university students in Hong Kong are obsessed with money," he added. "It's a situation that's depressing and one we don't want to see."
Students have been lured into stocks as China's booming economy hatched hugely popular public offerings, such as last year's listing of Internet firm Alibaba.com, which saw the stock triple on its debut.
But students say they also know how to handle the risks.
Ken Poon, at Hong Kong University, was short selling this week, having read up on how the subprime crisis was stoking fears of a US recession, sending a chill through financial markets. "I didn't actually lose money," 21-year-old Poon said. "I bet on the market falling and it did."
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