An educational campaign for fund investors unveiled in Shanghai
over the weekend is an important bid to bring rationality back to
the market. It is no less significant than the central bank's move
to raise interest rates or raise bank deposit reserve ratios in an
effort to mop up excess liquidity.
The six-month campaign, assisted by the Shanghai bureau of the
China Securities Regulatory Commission, will include 28 fund
management companies, 10 securities brokerages, six agent banks and
two law firms. It aims to build an educational channel for
investors and lay a solid foundation for a sustainable, stable and
healthy market development.
Over the past year, a nationwide frenzy of investing in stocks
and funds has caused enormous concerns among regulators and
experts.
Investors have plunged into the stock and fund markets in a
scale never seen before. Many people blindly believe the upcoming
2008 Beijing Olympics and the 17th National Congress of the
Communist Party of China will assure a bullish run for at least a
year.
Talking about stocks and funds has become the daily greeting for
many Chinese today. In fact, chiefs of some government institutions
and companies have had to enforce strict rules so that their
employees do not spend their time trading stocks during working
hours.
Most investors, especially the vast number of new ones, have
refused to learn lessons from the prolonged and painful stock
market doldrums in previous years.
Many rush to buy stocks and funds without knowing much about
individual companies, their products, strategies and industry
prospects. They make their decisions based on street rumors or some
"advice" posted on the Web.
While the fluctuating market these days may bring some to heed
warnings and give investments a second thought, education has
become critical in protecting the interest of investors, especially
those small and vulnerable ones.
Smart investors should not only help themselves by being wary of
risks and making rational decisions, they should also help
regulators keep an eye on rampant market irregularities, whether
it's insider trading, market manipulation or improper information
disclosure.
With more financial products added to the country's nascent
market, investor education should now be stepped up across the
country.
(China Daily July 3, 2007)