Since the establishment of two stock exchanges in Shanghai and Shenzhen in early 1990s, China’s capital markets have experienced amazing growth and become one of the largest capital markets in the world. The equity market is the dominant capital market and has been evolving and growing towards a more even mix of investor classes, with institutions such as investment funds, pension funds, insurance companies, corporates, sovereign wealth funds and Qualified Foreign Institutional Investors (QFIIs) playing a more prominent role. With the newly introduced Shanghai-Hong Kong Stock Connect, the Chinese equity market is expected to be more open to the international investor community. The bond and derivatives markets are emerging as well and there is huge growth potential in the near future.
However, the evolving China's capital markets are characterized with all sorts of problems: severe opportunistic corporate reporting practice which may cause resources misallocation; tight control of the government which may change the rule of the game halfway; inefficient financial intermediaries such as financial analysts and the mass media which may increase information asymmetry; severe financing constraints for all but the largest State Owned Enterprises; under-developed legal and institutional frameworks with insufficient protection to minority shareholders against insider expropriations, etc.
This course is designed to offer a detailed analysis of China's capital markets, ranging from the overall assessment of the macro-economic environment and political context, to the detailed micro level study of the specific players, instruments, and individual transactions. Through seminars, cases, discussions, and group projects, students explore the opportunities and challenges presented by the quickly evolving capital markets in China.
This course is designed for students who are interested in understanding the unique aspects of the capital markets in China. This certainly includes not only those who anticipate some interactions with Chinese companies (in China, Singapore or other part of the world) and Chinese investors later in their careers but also those who want to work in China. Many of the insights gleaned from the course can be readily applied to other emerging markets, thus this can also be a good course for students interested in understanding the functioning of emerging capital markets in general.
The objective of the course is to enable students to qualitatively
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