Monday, April 25, 2011

The Chinese are coming

The Chinese are coming because America does not want them.

Listings via RTO / merger have recently been suspended in the U.S. stock exchanges. This is due to lack of interest in such listings.

Many Chinese companies listed in the U.S. are now being sued by investors for fraud, inflated reporting and misleading statements. In the light of the present scenario, Bursa is likely to experience an influx of Chinese companies applying for listing in Bursa. A few Chinese stocks are already listed here. They are not well received and some are still below their IPO price.

Before a stock is allowed to get listed, a due diligence must be carried out. This means visiting its factories, testing and checking its products, talking to its CEO and workers and its customers as well. Bursa should have its own team of auditors to do this instead of depending too much on other auditors to ensure propriety. Does Bursa have the workforce to do this? If not, it should upgrade itself first.

Integrity, transparency and reliability must be implemented without compromise. Unless people feel safe to invest, they would rather leave their money in the banks.

Therefore if Bursa wants more activities in the stock market, it must do everything to ensure that it is a safe place to invest.

Most of our ACE counters are rubbish shares. Over the years, they show no growth, no dividend and no appreciation in their prices. They should be classified under a category called, "Useless". I wonder why anyone wants to invest in such counters.