Moody’s SFC penalty could harm China’s capital markets

Financial watchdogs are supposed to protect investors, but Hong Kong’s securities regulator is pushing for sanctions that would likely hinder price discovery and hurt the reputation of Chinese equity markets when they are fast opening up to foreign capital. Moody's was this month given leave to go to Hong Kong's Court of Final Appeal against being penalised for a 2011 report in which it raised concerns about Chinese companies, many of which are listed in Hong Kong. The US rating a…