Emerging Market Strategies

William Gamble

Increase Activity on Shanghai Stock Exchange

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This entry was posted on 7/9/2006 4:21 PM and is filed under Chinese Equity Investments.

According a recent column in the Financial Times, many investors from around the world have been flocking to China to size up its equity market. The 23% rise of price of Bank of China on its debut confirms this sudden enthusiasm for Chinese stocks. I might point out an obvious point that that the economic growth in China means that someone is making money. It does not necessarily follow that foreign investors in China will make money. For investors to make money, they have to be protected by good corporate governance and a functioning legal system. These do not exist in China. But telling foreign investors about the dangers of Chinese equity markets is like trying to tell lemmings about the dangers of a cliff.

 

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