IM firm in China/Hong Kong/Taiwan

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UnderDoggie

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Just out of curiosity, are there any established local IM firms at those three places? I spoke to someone from Taiwan and got the impression that the IM firms there does not have the same equity research approach we have in the states. Is that trues? I know HK is a well established financial hub in the pacific rim, but what about China and Taiwan? Oh yeah, I'm refering to the local IM firms, not GS, Morgan, or the likings.
 
http://www.shkonline.com/eng/startpage_main.jhtml

SHK is the largest local IM firm in Hong Kong
 
Hmmm, the company looks more like a brokerage firm than a traditional buy-side IM firm. Is it true that places over there don't have as big IM operations as here in the states? Very interesting...
 
There are local security firms that serve small investors in every city. For people that are wealth enough, they can get a hedge fund to manage their money. There are also various mutual fund companies. From what I know, there are lots of manipulation and insider trading in Mainland China. The security market is still in its infancy. The performance has been up in 06, but between 02 and 05, it was pretty deadbeat. Don't quote me on the time frame here, I haven't research my numbers. All the money in China are along the coast line. Maybe up Yangzi river as well. The real estate market along the coast has been crazy enough that most rich people probably prefer to put their money in housing instead of the stock market. Especially that the Chinese prefer investments with intrinsic value. An apartment building vs. pieces of paper that your broker tells you worth millions. Did I mention the lacking of a sound accounting standard and monitering practices that puts a negative setiment on the Stcok Market? Most bond issues are treasuries that resemble what it was like in 1800's America.

My point is, the way China is changing its system from planned economy to the quasicapitalism. Maybe eventually the political system from totalitarian to quasidemocracy. There are lots of money to be made. Risky though.
 
Hmmm, doesn't sound like people in Asia are accustom to saving their money through mutual funds from what I heard. I agree with you that the accounting standards are not very well enforced therefore the FSs are not very trustworthy.

Mni:
So I guess what you are saying is that because there is lack of demand for funds for various reasons, the IM industry is not very big over there? I also read in various articles that talk about the PE and VC booms over there.

With that said, anyone has comments on Hk and Taiwan? I know HK has a much more established and better regulated market. There are no major local IM players out there?
 
There's comments on both China and HK already so I will give my 2 cents on Taiwan.
If you are talking about the local "IM", they are called "ITC" (investment income trust) in Taiwan. And they are not very big, in fact, they generally account for less than 10% or even 5% of daily market turnover. The foreign investors (QFII) generally account for 20-30% of turnover. The remaining t/o is ALL contributed by the retail investors. There are two reasons for it: 1) the local investors are highly involved in punting stocks themselves so they don't put money in mutual funds 2) the cross-straight relationship poses a potential danger to wealthy individuals, so alot of them wired out their money to abroad (HK for example). As a result, local IM industry is small in Taiwan. Some global long funds or hedge funds, however, may have dealing or research operations in Taiwan but in small scale (much larger in HK & Singapore). Other than those, the local insurance houses actually manage good sizes of funds. The largest I believe is Cathay Life Insurance that is under Cathay Financial Holdings. The government funds also do manage large funds but they are notorious for intervening the market (ie. buying stocks before election, etc). Hope it helps, cheers.
 
Wow, that was informative, along with all the comments above.

Snowblow11, are you from Taiwan yourself? Just curious, what is your background?
 
im a canadian but hv been doing arbitrage trading and then sales trading in tokyo, taiwan & hong kong... altogether only about a couple years experience in the industry...
no mba and no cfa... i had the plan to study for the cfa but was too lazy to do it bcoz the job drained too much energy out of me... i've been reading this forum quite frequently but i dont usually post here... cheers
 
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