#1: ‘China Is the New Dot-Com,’ Says Outgoing Securities Chief (1257 reads) 作者: ferncrest, 来自: 地球时间: 2011-6-10 周五, 11:19 — 作者：ferncrest 在 谈股论金 发贴, 来自【海归网】 http://www.haiguinet.com
‘China Is the New Dot-Com,’ Says Outgoing Securities Chief 【转自华尔街日报】
HONG KONG—The outgoing head of Hong Kong’s securities regulator warned investors against rushing headlong to buy shares in Chinese companies, calling China “the new dot-com” of the investment world.
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WHEATLEY
Thomas Lee for The Wall Street Journal
Martin Wheatley says, “Everybody wants a piece of China.”
WHEATLEY
WHEATLEY
“Everybody wants a piece of China,” Martin Wheatley said in an interview on his final day as chief executive officer of the Securities and Futures Commission. “Therefore, there has been a rush to Chinese companies” without investors asking the normal questions about their fundamentals, he said, comparing the run-up to the Internet stock boom of the late 1990s in the U.S.
The comments by Mr. Wheatley come amid scrutiny of accounting practices and allegations of fraud at some overseas-listed Chinese businesses. The Securities and Exchange Commission has set up a group to investigate problems with a number of Chinese companies that trade on U.S. exchanges. Trading in several stocks of U.S.-listed Chinese companies has been suspended amid allegations of accounting irregularities and other improprieties.
Shares of Sino-Forest Corp., a Hong Kong-based tree-plantation company listed in Toronto, have plummeted in recent days after a short seller published research alleging problems with the company’s accounting. The company, which has its assets in mainland China, has called the research inaccurate and says it is investigating the allegations.
This year, trading in shares of Hong Kong-listed China Forestry Holdings Ltd. were suspended after its auditors found irregularities in its books.
Questions about accounting and corporate governance at Chinese-listed companies are important in Hong Kong, where China-related securities account for more than 70% of the trading volume on the Hong Kong exchange.
Analysts said the temptation among some U.S. investors may be to conclude that all Chinese-listed companies are now suspect, and that the spate of alleged frauds reflect deep-rooted ethical problems in a country notorious for product-safety scandals and fake goods.
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Most of the companies accused of impropriety are privately run, not state-owned enterprises. State-run companies were once thought to pose the biggest investment risk because of politicized management, their lack of accountability to shareholders, and the fact that their profits rely on favorable government regulation in protected markets.
So far, the performance of many of the listed Chinese banks, natural-resources companies and other big firms under state control has been stellar over time. Still, analysts said it is too early to make generalizations about the state versus the private sectors. For example, some analysts believe that state banks face big problems of bad loans as a result of expanded lending over the past several years.
Mr. Wheatley, a Briton who spent 18 years at the London Stock Exchange before taking the Hong Kong post in 2005, said the problems with Chinese companies listing outside their home jurisdiction, including those that list in Hong Kong, were exacerbated by the fact that regulators seeking more information about a company rely on third-party investigators.
He said, though, that the Hong Kong commission’s relations with its Chinese counterparts have been positive, noting that it has received information on Chinese-based companies from regulators there as needed.
The commission said Wednesday that it appointed Deputy Chief Executive Alexa Lam as acting CEO.
Mr. Wheatley emphasized the need for investment banks and brokerages that underwrite share listings in Hong Kong to take greater responsibility for keeping substandard companies at bay. One way the regulator hopes to enforce that is by holding the underwriters liable for the accuracy and completeness of listing prospectuses, Mr. Wheatley said.
Mr. Wheatley also cautioned that trading in products based on China’s currency, the yuan, likely will develop at a much slower pace than many would expect. Mr. Wheatley said the hitch is a lack of liquidity for the currency outside of China.
“I think it will happen, but I’m thinking in three to five years is when we really see that market develop,” he said.
During his time in Hong Kong, Mr. Wheatley, 52 years old, earned a reputation as a proactive enforcer, combating insider trading and other market misconduct, as well as boosting the commission’s standing in Hong Kong and abroad.
After a brief hiatus, Mr. Wheatley will take a temporary position as a managing director of the U.K.’s Financial Services Authority. He eventually will run a new consumer-protection group, to be spun out of the FSA, called the Financial Conduct Authority.
