Chinese investors play US stock market

Updated: 2013-07-17 15:46


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While the door for Chinese companies to list their shares in the US has not fully opened, waves of Chinese investors are trying their luck in the US stock market, the Securities Times reported.

According to incomplete statistics, the number of US stock traders in China is around 300,000. In fact, making personal direct investments in overseas securities markets has yet to be officially recognized by China. Currently, US stock traders have to trade in Hong Kong or open accounts directly through US online securities.

Some investors believe US stock traders are among the higher level groups within the domestic capital market. They must be fluent in English, be able to withstand high-risk, familiar with the rules of the world’s most advanced capital market and adept at using various investment tools.

But in fact, all investors need to do is simply fill out some forms and upload their passport, ID card, proof of address and other scanned documents to a specified mailbox and wait for them to be reviewed. When everything checks out, they are then ready to use their US stock account.

In order to attract Chinese investors, many US brokerages provide Chinese web pages and trading software and even a Chinese hotline.

For example, the Scottrade securities website not only offers a Chinese hotline to help customers open accounts but also offers instructional videos in Chinese to allow investors to better understand the rules.

Different from the custom of following the market maker in the A-share market, these US stock traders get together not to predict stock prices but to analyze the listed company’s current situation and future prospects.

A trader by the name of Jiaren said that he has formed a team with five other people. They track and analyze a listed company and share information about stocks they have bought or sold. He also said that if someone outside the team wants consulting on investing in US stocks, they will only offer guidance on how to open an account but never make recommendations or predictions.

Companies in the same industry are of a reasonable value in the US stock market while relatively high in the A-share market, said one man whose web name is Master Meng.

In China, sometimes the share price of a company which has a good performance and outlook does not rise while the share price of those companies coming out of nowhere can be incredibly high. The situation is contrary in the US stock market, he said.

However, these US stock traders who advocate value investment also face risks. Since there are no price restrictions, US stock prices usually experience big fluctuations, so people should watch out for trust and short risks.