HONG KONG (Reuters) - Hong Kong students are piling loans and family savings into a volatile stock market, a growing trend that worries social workers in a city known for its derivatives-savvy grandmothers and stock-tipping taxi drivers.
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 panicked 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 by many as a harmless pastime for finance 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" in a speech on the phenomenon.
"For the sake of a little greed, good youths have become like diseased gamblers," Poon said "Is it worth it?"
Rags-to-riches tales convince many that it is worth it.
A 22-year-old graduate was recently feted in newspapers as Hong Kong's student "stock god" for transforming his family's wealth from US$9,000 to US$448,700 over a 36-month period.
But social workers say students are racking up huge debts on credit cards to fund frenzied day trading.
"Some students have no money, so they use their student grants and loans to use it to speculate on stocks," said Joe Tang, a social work director at the Caritas Addicted Gamblers Counselling Centre.
"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 initial public offerings, such as last year's listing of Chinese 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 U.S. 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."