投资金融WillChineseStockMarketsMirrortheBehaviourofthe
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Responsible to? • Can Regulation be Protect with
Financial Policemen being Proactive?
INVESTORS
Institutional
Private
Pensions
Insurance Mutual Funds
Investors’ Confidence =
Quoted Companies on Stock Market and Privatised Industries Previously Nationalised
Accountants Lawyers
Merchant Banks Commercial Banks
Investors Institutional - Pensions - Insurance Co.(life) - Mutual Funds Private Investor - Direct - Indirect
Analysis
Information/Reporting
Education
Efficient Infrastructure
Transparency
Leads to:
Accountability
• Easier and more effective enforcement. • Increased efficiency reduces costs. • Improved flexibility of the infrastructure to respond
Will Chinese Stock Markets Mirror the Behaviour of the
NASDAQ?
-Where is the solution?
Christopher Poll Chairman,
Greater China Consultancy Ltd.,
3 QUESTIONS RAISED
Investors’ Education
Confidence
I
n
v
e
s
t
Education
o
r
s
Investor Protection/Confidence
Competetion = Accountability
Transparency
Disclosure
Timeliness
Accuracy of Data
NASDAQ Corporate Profits
???
Chinese Quoted Stocks Corporate
Profits ???
$$$
IF CONFIDENCE IS LOW C
THEN MONEY FLOW IS MINUTE $
IF CONFIDENCE IS HIGH CONFIDENCE
Centred around
Public Investors
Financial Policemen
Institutional Managers
Government
Regulators and Central Bank
Financial Policemen are advisors to
(Follow and abide by Rules & Regulations)
HOW TO DEFINE A “WELL REGULATED MARKET”?
The Financial Markets are Dynamic
• Business is “Proactive” • But Regulators are “Reactive” not
“Proactive • The System of Regulation and
effectively and competitively.
A Chinese Tailor Made Solution for the Chinese Fund Industry
Investors’ behaviour
Stock Investors
Fund Investors
Securities Dealers Brokers
Stock Market
23
PRIVATE SECTOR
Investment Stock Commercial
Accountants Lawyers Bankers Brokers
Banks
Conflict of Interest?
Conflict of Interest
• Who is the client? • Who are the Financial Policeman
THEN MONEY FLOW IS LARGE $$$$$$$$$$$$$$$$$$
What is the Criteria For Investing?
1. What do you think is the most important influence on the stock market in China today?
Enforcement can never be completely Flexible and Dynamic • Importance of Fiduciary Responsibility
Financial Infrastructure
MAIN FACTORS FOR FUNDS
Government
Securities Investment Advisors
Fund Managers
Securities Exchange
OTC
Futures Exchange
SEC/CSRC
CBC/PBC
WHAT RELEVANCE A PRICE/EARNINGS RATIO?
1995 - 2000 Confidence
• HOW TO DEFINE A “WELL REGULATED MARKET”?
• WHAT RELEVANCE A PRICE/EARNINGS RATIO?
• IF INSTITUTIONAL FUNDS ARE A STABILISING FACTOR FOR THE STOCK MARKET, WHY ARE DEVELOPED MARKETS SO VOLATILE?
Financial Policemen being Proactive?
INVESTORS
Institutional
Private
Pensions
Insurance Mutual Funds
Investors’ Confidence =
Quoted Companies on Stock Market and Privatised Industries Previously Nationalised
Accountants Lawyers
Merchant Banks Commercial Banks
Investors Institutional - Pensions - Insurance Co.(life) - Mutual Funds Private Investor - Direct - Indirect
Analysis
Information/Reporting
Education
Efficient Infrastructure
Transparency
Leads to:
Accountability
• Easier and more effective enforcement. • Increased efficiency reduces costs. • Improved flexibility of the infrastructure to respond
Will Chinese Stock Markets Mirror the Behaviour of the
NASDAQ?
-Where is the solution?
Christopher Poll Chairman,
Greater China Consultancy Ltd.,
3 QUESTIONS RAISED
Investors’ Education
Confidence
I
n
v
e
s
t
Education
o
r
s
Investor Protection/Confidence
Competetion = Accountability
Transparency
Disclosure
Timeliness
Accuracy of Data
NASDAQ Corporate Profits
???
Chinese Quoted Stocks Corporate
Profits ???
$$$
IF CONFIDENCE IS LOW C
THEN MONEY FLOW IS MINUTE $
IF CONFIDENCE IS HIGH CONFIDENCE
Centred around
Public Investors
Financial Policemen
Institutional Managers
Government
Regulators and Central Bank
Financial Policemen are advisors to
(Follow and abide by Rules & Regulations)
HOW TO DEFINE A “WELL REGULATED MARKET”?
The Financial Markets are Dynamic
• Business is “Proactive” • But Regulators are “Reactive” not
“Proactive • The System of Regulation and
effectively and competitively.
A Chinese Tailor Made Solution for the Chinese Fund Industry
Investors’ behaviour
Stock Investors
Fund Investors
Securities Dealers Brokers
Stock Market
23
PRIVATE SECTOR
Investment Stock Commercial
Accountants Lawyers Bankers Brokers
Banks
Conflict of Interest?
Conflict of Interest
• Who is the client? • Who are the Financial Policeman
THEN MONEY FLOW IS LARGE $$$$$$$$$$$$$$$$$$
What is the Criteria For Investing?
1. What do you think is the most important influence on the stock market in China today?
Enforcement can never be completely Flexible and Dynamic • Importance of Fiduciary Responsibility
Financial Infrastructure
MAIN FACTORS FOR FUNDS
Government
Securities Investment Advisors
Fund Managers
Securities Exchange
OTC
Futures Exchange
SEC/CSRC
CBC/PBC
WHAT RELEVANCE A PRICE/EARNINGS RATIO?
1995 - 2000 Confidence
• HOW TO DEFINE A “WELL REGULATED MARKET”?
• WHAT RELEVANCE A PRICE/EARNINGS RATIO?
• IF INSTITUTIONAL FUNDS ARE A STABILISING FACTOR FOR THE STOCK MARKET, WHY ARE DEVELOPED MARKETS SO VOLATILE?