The appraisal of ordinary shares by Chinese financial analysts
Purpose - The purpose of this paper is to provide insights into recent financial analysis practice in the Chinese context. The paper aims to examine the approaches pursued and information used by Chinese financial analysts in investment appraisal of ordinary shares. The research seeks to explore influences upon analysts' decision making and how analysts perceived the Chinese investment environment. Design/methodology/approach - A questionnaire based survey approach was used, conducted in 2003 with 65 Chinese financial analysts. Findings - The findings indicate that fundamental analysis was the predominant technique adopted in appraising equities in line with the development of institutional investors and improved market efficiency. Regarding information used to analyse companies, annual reports constituted the most influential source. The Chinese analysts favoured usage of International Financial Reporting Standards (IFRSs) and International Accounting Standards (IASs) by A-share companies. The findings indicate changes within the financial analyst community, suggesting pressure for higher quality analysis and increased use of more sophisticated techniques despite ongoing market shortcomings. Opinions vary as to how important financial analysis is in influencing stock valuation or, crucially, socio-economic welfare. However, studies putting the analysts' role in perspective Originality/value - This paper provides insights into how specific country contexts influence financial analysts' investment appraisal practice in interims of incentives, information sources and techniques adopted.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 19 (2011)
Issue (Month): 1 (May)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://emeraldgrouppublishing.com/products/journals/journals.htm?id=ara Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Moyes, Glen D. & Park, Kyungjoo & Wang, Andrew Minglong & Williams, Patricia A., 1997. "Factors affecting an analyst forecast revision-- Taiwan and the United States: A comparison," The International Journal of Accounting, Elsevier, vol. 32(1), pages 63-77.
- Richard G. Barker, 1999. "Survey and Market-based Evidence of Industry-dependence in Analysts' Preferences Between the Dividend Yield and Price-earnings Ratio Valuation Models," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 26(3-4), pages 393-418.
- Grossman, Sanford J & Stiglitz, Joseph E, 1980.
"On the Impossibility of Informationally Efficient Markets,"
American Economic Review,
American Economic Association, vol. 70(3), pages 393-408, June.
- Sanford J Grossman & Joseph E Stiglitz, 1997. "On the Impossibility of Informationally Efficient Markets," Levine's Working Paper Archive 1908, David K. Levine.
- B. Tijjani, 2009. "The appraisal of equity investments by Nigerian investors," Qualitative Research in Financial Markets, Emerald Group Publishing, vol. 1(1), pages 6-26, March.
- Xiao, Zezhong, 1999. "Corporate disclosures made by Chinese listed companies," The International Journal of Accounting, Elsevier, vol. 34(3), pages 349-373, 08.
- Ding, Yuan & Su, Xijia, 2008. "Implementation of IFRS in a regulated market," Journal of Accounting and Public Policy, Elsevier, vol. 27(6), pages 474-479.
- Groenewold, Nicolaas & Tang, Sam Hak Kan & Wu, Yanrui, 2003. "The efficiency of the Chinese stock market and the role of the banks," Journal of Asian Economics, Elsevier, vol. 14(4), pages 593-609, August.
- Bradford Cornell & Richard Roll, 1981. "Strategies for Pairwise Competition in Markets and Organizations," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 201-213, Spring.
- Shahed Imam & Richard Barker & Colin Clubb, 2008. "The Use of Valuation Models by UK Investment Analysts," European Accounting Review, Taylor & Francis Journals, vol. 17(3), pages 503-535.
- Wong, Michael Chak-sham & Cheung, Yan-Leung, 1999. "The practice of investment management in Hong Kong: market forecasting and stock selection," Omega, Elsevier, vol. 27(4), pages 451-465, August.
- Kalok Chan & Albert J. Menkveld & Zhishu Yang, 2008. "Information Asymmetry and Asset Prices: Evidence from the China Foreign Share Discount," Journal of Finance, American Finance Association, vol. 63(1), pages 159-196, 02.
- Moyes, Glen D. & Saadouni, Brahim & Simon, Jon & Williams, Patricia A., 2001. "A comparison of factors affecting UK and US analyst forecast revisions," The International Journal of Accounting, Elsevier, vol. 36(1), pages 47-63, 02.
- Yuri Biondi & Quisheng Zhang, 2007. "Accounting For the Chinese Context: A Comparative Analysis of International and chinese Accounting Standards Focusing on Business Combination," Post-Print halshs-00203358, HAL.
- Richard Barker, 1999. "The role of dividends in valuation models used by analysts and fund managers," European Accounting Review, Taylor & Francis Journals, vol. 8(2), pages 195-218. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eme:arapps:v:19:y:2011:i:1:p:5-30. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)
If references are entirely missing, you can add them using this form.