Fangzhou LU
Prof. Fangzhou LU
Assistant Professor

3910 2533

KK 1019



Climbing the digital ladder

While Hong Kong may have all the financial credentials to be a cryptocurrency hub, industry experts doubt that digital currencies will become popular, and warn that novice investors could get hurt. Zeng Xinlan reports.

The Real Value of China’s Stock Market

What capital allocation role can China’s stock market play? Counter to perception, stock prices in China have become as informative about future profits as they are in the US. This rise in stock price informativeness has coincided with an increase in investment efficiency among privately owned firms, suggesting the market is aggregating information and providing useful signals to managers. However, price informativeness and investment efficiency for state-owned enterprises fell below that of privately owned firms after the postcrisis stimulus, perhaps reflecting unpredictable subsidies and state-directed investment policy. Finally, evidence from realized returns suggests Chinese firms face a higher cost of equity capital than US firms.