Last week, the China Securities Regulatory Commission (CSRC) announced that it will begin to publish the average price-earnings ratio (P/E ratio) of listed companies on a daily basis, compiled and issued according to industrial classification by two designated index companies. Despite its ambiguous significance, the price-earnings ratio is a well-known reference index for stock evaluation in China, both for veteran investors with over 20 years of experience and for fledgling university students trying their hand in the market. With the P/E ratio enjoying such popularity, the CSRC now intends to guide...

After a series of new policies (forced dividends and definite exiting system to name a couple) were initiated by the newly-appointed Chairman of the China Securities Regulatory Commission (CSRC) Guo Shuqing, the market’s call for IPO system reform has been gathering steam. Since the launch of the Growth Enterprise Market (GEM) stock market, incredibly high IPO price-to-earnings (P/E) ratios of 80 or even 100 are no longer shocking news in China. Such a high P/E ratio is understandable during a boom period, but the China A-Share market has lapsed into sluggishness since last year, with the share...

“A Tale of Two Cities” is befalling on Sino Forest. As in the world-famous novel by Charles Dickens, the Chinese company sees its destiny split between two cities. In Toronto, the Ontario Securities Commission launched a probe into Sino Forest’s activities. The company’s share value dropped from C$ 18,21, to C$ 4,92 in the space of a few days and trading was suspended on June 8. Losses by shareholders are equivalent to many millions of dollars. At the HKSE, shares of the Greenheart group were also dragged down dramatically because of fraud allegations by its parent company, i.e. Sino Forest....