Buying into China's Volatility  

Oleh:

Pettis, Michael

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Far Eastern Economic Review vol. 170 no. 01 (2007), page 26-30.
Topik: Initial public offerings; Volatility; Stock prices; Solvency; Valuation; Bank loans; Banking industry

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: FF21.19 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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According to a senior manager from Bank of China, Chinese banks are healthy enough for markets to assign very high values to their shares. Share prices have informational content and market valuations must reflect real investor perceptions. Two weeks earlier the biggest public offering in history, the $22 billion IPO by the Industrial and Commercial Bank of China (ICBC), had been by almost any standard a success. Markets process many kinds of information, however, and because shares in Chinese banks and shares in global banks represent different kinds of claims, it is a mistake to assume that their informational content is the same. Shares of companies with dramatically different levels of solvency trade on very different types of information, and while there have certainly been improvements in lending practices in recent years, Chinese banks have a long way to go before they are healthy and can be considered prudently managed.

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