Great Wall's 21% jump shows risk of shorting stocks in Hong Kong

HONG KONG (June 13): Short selling can be a tough business, as those betting on declines in Hong Kong’s equity market are finding out.

Great Wall Motor Co. is the scene of the latest smackdown. Short interest in China’s biggest SUV maker is near a five-year high, but the shares are in rebound mode, soaring 21% on Monday to bring the recovery from last month’s nadir to almost 40%.

Traders have been similarly burnt by other targets in the city, with property developer China Evergrande Group earning the title of the world’s most painful short this year. AAC Technologies Holdings Inc. and Dali Foods Group Co. have also rallied despite being the subject of investigations into their accounting by short-selling research firms.

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