Videos of Stock Analysts under Fire


china shanghai

(Beijing) – Financial and investment circles in China are buzzing over the amateur videos being made by some analysts in the market in order to get the attention of investors. Lately some videos have amateur videos have surfaced on some websites and mobile apps which depict some analysts presenting their views and recommending the investors to buy some certain stocks on in the light of the strong research of their firm.

On April 7, a clip appeared online, showing a young women, who was dressed in traditional Chinese attire, talking about why the investors should buy the stocks of Shenzen-listed ZTE Corp., a company providing telecommunication equipment and services. A stock analyst from Founder Securities, Liao Lei, suggests in a two-minute video that it was worth investing in ZTE because research has shown that its income has been stronger than ever, it is also being managed by a team which is young, capable and ambitious. It also seemed from the video that it was filmed in a living room or a kitchen.
Financial workers widely shared this video on social media. It became popular because of the information being presented by the analyst which impressed the viewers. It should be kept in mind that the industry in which analysts work is marked by professionals who have shun to spotlight and most of them imitate the tone of news commentators.
Several other similar clips have also been uploaded to streaming sites, with analysts representing various brokerages firms including Haitong Securities and Essences Securities recommending stocks to the investors.
Some critics are of the view that the clips are a publicity stunt. According to a public fund manager, he did not even pay attention to what was being said by them in the videos. Moreover, he also added that everybody was doing it as it has started to become a trend and some have been doing it for fun and for them the analysis's quality does not matter.
A researcher form a securities firm said that there has been a fierce competition in some recent years and it was necessary for analysts to somehow catch the attention of investors. Some critics have also cited the article written by chief economist of Essence Securities, Gao Shanwen, which was published a few years back in which he argued that due to a surge in the marketing tricks the quality of the research of the securities' firms has been declining.
One macroeconomic analyst working for a brokerage firm, on conditions of anonymity told that some of his coworkers have turned to social media and streaming websites in order to promote their analyses. He also added that women featured in the most videos that have been quite popular.
These discussions have surfaced when the securities regulator has asked the brokerage firm to properly supervise and manage how their employees advertise their corporate research reports being published, especially on social media.
The notice which was issued by Shanghai branch of the China Securities Regulayory Commisison (CSRC) addressed the brokerages and conveyed that CSRC is concerned because research reports of some securities firm have drawn attention of the investors and made the media as well as the public to question the ethics and professionalism of the analysts and researchers of securities firms.
The regulator's note, which was also viewed by Cixin, did not indicate the reports or firms which published the. A similar notice was also issued by the Beijing office of CSRC, the employee of a security firm said.
The branch of CSRC which is Hubei, in January also criticized the securities firm Changjiang Securities over a report which according to them had a poor title, but it was not elaborated by them.
Minsheng Securities, in December bowed to the pressure being put by the regulators and reprimanded the authors who used slangs in two research reports which were widely circulated. IT said that the researchers made use of quite an inappropriate writing style and eventually caused bad social influence.
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