China seems to be the destination to be ... Investors are looking to get their hands 'red' with a handful of China everywhere. While it is deemed to be THE upcoming market in the world but is it that lucrative for the individual investors ??
China's GDP has increased by almost 4 times in the past decade perhaps making it an awesome investment to buy, even better than owning an ice gola shop in this sweltering heat !!
But GDP does not act as a security, in transition if we look China's stock markets have hardly showed any transition. It seems that the Chinese production is running the marathon while their stock exchanges (Shanghai & Shenzhen) are running the 110 metres hurdles. Liu Xiang dont get worked up, its just a reference !!!
But the blame has to go to the Initial public offering system in place. The prices are heavily over priced for the benefit of bankers and underwriters but there are huge losses on the first day of trading itself. The small time investors have lost the confidence with this pattern. Pretty much like how Bollywood has in Uday Chopra & Tushhar Kapoor.
However off late a new set of rules for stock listing have been injected which would bring in much needed stability to the 'Roller coaster' markets. This would decrease the decade long financial erectile dysfunction and probably help China 'climax' at the right time.
So does that mean that a fast growing country disappoints the investors ? Well the analysts tend to agree.
Stock markets in China and even other fast growing nations came into real existence only in the last two decades as compared to the NASDAQs and the LSEs. Plus there is a severe dilution of individual investors as the investors tend to invest on both the exchanges simultaneously. The exchanges acted as an exit route for companies from their difficulties rather than focussing on investors.
The other main reason is the political and legal scenario engulfing these markets. The insider trading phenomenon had hit them hard. The investors or people in close contact with the inner most circles made substantial profit. Its very much like how the only person to know the syllabus right before the exam is the photocopier guy.
So the Chinese equity markets are in a transition phase and with some serious amendments made, they will make the grade. Till then its less sugar in your tea ... as they say 'Chini kam' !!
China's GDP has increased by almost 4 times in the past decade perhaps making it an awesome investment to buy, even better than owning an ice gola shop in this sweltering heat !!
But GDP does not act as a security, in transition if we look China's stock markets have hardly showed any transition. It seems that the Chinese production is running the marathon while their stock exchanges (Shanghai & Shenzhen) are running the 110 metres hurdles. Liu Xiang dont get worked up, its just a reference !!!
But the blame has to go to the Initial public offering system in place. The prices are heavily over priced for the benefit of bankers and underwriters but there are huge losses on the first day of trading itself. The small time investors have lost the confidence with this pattern. Pretty much like how Bollywood has in Uday Chopra & Tushhar Kapoor.
However off late a new set of rules for stock listing have been injected which would bring in much needed stability to the 'Roller coaster' markets. This would decrease the decade long financial erectile dysfunction and probably help China 'climax' at the right time.
So does that mean that a fast growing country disappoints the investors ? Well the analysts tend to agree.
Stock markets in China and even other fast growing nations came into real existence only in the last two decades as compared to the NASDAQs and the LSEs. Plus there is a severe dilution of individual investors as the investors tend to invest on both the exchanges simultaneously. The exchanges acted as an exit route for companies from their difficulties rather than focussing on investors.
The other main reason is the political and legal scenario engulfing these markets. The insider trading phenomenon had hit them hard. The investors or people in close contact with the inner most circles made substantial profit. Its very much like how the only person to know the syllabus right before the exam is the photocopier guy.
So the Chinese equity markets are in a transition phase and with some serious amendments made, they will make the grade. Till then its less sugar in your tea ... as they say 'Chini kam' !!
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