The appraisal of ordinary shares by Chinese financial analysts

Jing Wang, Jim Haslam and Claire Marston

Asian Review of Accounting, 2011, vol. 19, issue 1, pages 5-30

Abstract: 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 vis-à-vis other forces contribute to broadening understanding of this significantly under researched area. This current study contributes to filling this gap. 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.

Keywords: Accounting; China; Equity capital; Financial analysis; Shares (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.emeraldinsight.com/journals.htm?issn=13 ... 926563&show=abstract (text/html)
Cannot be freely downloaded

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eme:arapps:v:19:y:2011:i:1:p:5-30

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://www.emeraldinsight.com/ara.htm

Access Statistics for this article

Asian Review of Accounting is edited by Jeffrey Faux

More articles in Asian Review of Accounting from Emerald Group Publishing
Series data maintained by Chris Harris ().