Information is power for investors too
While putting stock market recovery at the top of their New Year's wish lists, many Chinese investors may have wondered what had goaded them into this bear trap in the first place.
If you need to ask, you should study the lengthy paper on market transparency, or the lack of it, published by the research center of the Shanghai Stock Exchange in July 2008. Although the paper didn't directly link the information gap to the creation of the asset bubble that imploded last year, destroying many billions of yuan of personal wealth, at least on paper, it cited several extreme cases to illustrate how easy it was to whip up a buying frenzy with misinformation.
Despite efforts by the watchdog agency and the stock exchanges to enforce the disclosure requirements, public information released by the listed companies is often inadequate and sometimes misleading. This shortcoming has made it difficult for investors to evaluate the earnings potential of a listed company and make an informed investment decision.