While returns from emerging stock markets have frequently been quite attractive, and their relatively low correlations with returns in developed markets offer good diversification opportunities, relatively little is known about the research information available to potential investors in emerging markets. Obviously, in deciding whether to invest in an emerging market, investors need to know if sufficient information is available to make sound decisions.
The Singapore and Malaysia stock market stands as a not untypical example of emerging Asian markets. A survey of 39 financial executives, analysts and other experts in Singapore indicates that investment analyst contacts with corporate management, corporate financial statements and research information from securities dealer firms are the most important sources of investment information. The least important sources are considered to be corporate management speeches and financial publishing services, mainly because such presentations are rarely made and publishing services are almost nonexistent.
Respondents considered managements of Singapore-listed companies to be just as informative in individual analyst contacts as Western managements, but considerably less open in public pronouncements. They indicated that the quality of corporate financial statements and securities dealer research in Singapore is improving and among the highest in Asia, but not yet up to Western standards. One-third of the respondents considered gossip, rumors and tips to be an important source of information.
The consensus was that professional investors in Singapore currently have adequate access to sources of investment information.
