The rise of emerging markets has seen an explosion in IPO listings in developing economies. But China serves as an example of how a high GDP does not necessarily equate to high returns. Major challenges abound – constant see-sawing due to an immature stock market, a closed political and legal system and insider trading.
So who are the real winners? The FT suggests that only investors who possessed critical information – often linked to state policy announcements – were able to make money.
The rest tend to find themselves being played like pawns in the game. To create a fairer playing field, Chinese securities regulators are trying to improve sluggish stock returns with new stock listing rules. As a new playbook emerges, will it change the face of the game by allowing for more winners?