Foreign Investor Ratings
Introduction[edit]
FIR studies the IR China-listed companies’ and monitors English news and published research that could impact a company’s shares performance.
Ratings Definition[edit]
Metrics and Factors based on 5-years of solid research and aligning with China’s recent years of market liberalizations that include Shenzhen Hong Kong Stock Connect, Shanghai Hong Kong Stock Connect, elimination foreign investment quota on Qualified Financial Institutional Investor (QFII), and allowing Sovereign Wealth Funds, foreign-registered institutions and qualified foreign residents in China to trade directly on domestic A-shares[1].
A string of metrics and factors were formulated to rate each company with the followings:
• Foreign Institutional Investors' Holdings' by Percentage
• Foreign Institutional Investors' Fund Flow Analysis
• Foreign Investors Relation Management’s Performance Metrics
• IR Performance
• Chinese News Coverage
• English News Coverage
• Analysts’ Coverage (Chinese)
• Analysts’ Coverage (English)
• Scorecard
Ratings Description[edit]
Upon analysing the string of metrics and factors to rate each companies, the ratings ranging from A+ to D will be given to the respective companies upon the publication of the report[2].
A+: To make it to the highest rating, a company must have foreign investment proportion higher than the average of all A-shares and its industry’s average. Its latest month should see an increase of more than 3% in foreign investment over previous month, or a net growth rate higher than A-shares ’ average over a period most current 3 months. On the qualitative aspects we assigned foreign investor relations performance metrics to the overall scoring. We find companies rated A+ in most current quarter as sound investment for foreign institutional investors.
A: The company’s proportion of foreign investment is either higher than the A-shares average or its industry’s average. It must see positive net growth over the latest 3 months.
B: Its foreign investment is lower than the average of all A-shares and its industry’s. Its latest month has either declined or remained the same level. Performance on foreign investor relations’ metrics has little impact on overall scoring due to very small proportion of foreign investors and the total sum invested.
C: This rating shows little or almost no foreign investment. Its proportion of foreign investments is below all A-shares’ average and industry’s average in its latest 3 months. Scoring on foreign investor relations’ performance metrics is insignificance if the foreign investors are not participating in investing the company.
D: This lowest rating is given to company that failed to meet all 5 core benchmarks. It shows zero or no foreign investment, has poor coverage in both domestic and foreign news, and very few Chinese or English analysts’ reports. Its IR management does not meet professional standards.
References[edit]
China Knowledge. (n.d.). Foreign Investor Ratings English. Www.Chinaknowledge.Com. https://www.chinaknowledge.com/download/whitepaper/FIR_ENG.pdf
- ↑ "中盛投资者关系服务". ir.chinaknowledge.com. Retrieved 2021-01-19.
- ↑ China Knowledge. "FIR White Paper" (PDF). FIR.
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