- CNTV English - CCTV News

China concept stock prices suffer decline amid scandals

08-03-2011 17:24 BJT

Watch Video

Play Video

Several overseas investors have been short-selling Chinese concept stocks in recent months amid a series of scandal involving Chinese companies going public overseas. The selling has led to a decline in the share price of these companies.

Spreadtrum Communications Inc., is a chip manufacturer listed on the Nasdaq, and a victim of the short-selling scandal.

They were forced to refute charges of financial fraud raised by a U-S firm called Muddy Waters.

Li Liyou, chairman of Spreadtrum Communications Inc. said, "First of all, it's classless. Secondly, it's superficial. Thirdly Muddy Waters doesn't understand our fundamental operation. Fourthly, all their accusations are false. We explained all 15 doubts raised by them. Actually we responded in the second day of their accusations, they apologized on the third day."

The prompt response helped Spreadtrum Communications gain back investor confidence.

Fei Guoping, CEO from China Merges & Acquisitions Association said, "Cases like Spreadtrum Communications, Inc. is a typical example to short-sell a company. Muddy Waters's accusations report will cause certain fluctuations of the stock market by and large."

The reason for the short selling of China concept stocks on the U.S. stock market is easy to understand.

When speculators focus on Chinese concept stocks, a number of firms were unfairly attacked.

Zhang Lianqi, consultant expert from Internal Control Committee of Ministry of Finance said, "I think some people on Wall Street are trying to mislead investors about Chinese concept stocks. Of course I admit we might have a few 'bad apples' but it's not as bad as they say -- that almost all are blacklisted. It doesn't match the rapid growth situation happening now in China."

U-S markets, with stock exchanges and investment banks winning business and investors finding opportunities can share in the fruits of China's rapid economic growth.

Zhao Xijun, professor from Renmin University of China said, "For large scale enterprises, they are the main body of China's economy. And speaking from the concept of these enterprises and public companies, therefore it's unreasonable to say China's enterprises are all doing badly."

Part of the perception problem lies in the fact that many Chinese enterprises have cooked their books or failed to publish financial information required under U.S. law.

To avoid future problems from arising, Chinese enterprises should seek ways to enhance their financial capability.

Editor:Li Wanran |Source: CNTV.CN

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program