J.P. Morgan said on Wednesday it is adding five stock analysts in Shanghai and hiring up to ten more this year as the US investment bank makes a push into China's increasingly important, if risky, markets.
The bank, which now has more than 20 research analysts covering Chinese companies from around Asia, will cover conglomerates, consumer companies, financial institutions, utilities and oil and gas and auto companies from Shanghai.
Investors have been wooed by China's booming economic growth but risks such as poor financial disclosure and the possibility of an abrupt slowdown have instilled caution.
For example, China Life Insurance Co, last year's largest initial public offering, is being probed by US and Hong Kong regulators over an audit into accounting irregularities.
But investment banks believe China's stock markets will eventually be among the world's largest and most important, and firms such as Citigroup and Credit Suisse First Boston are jostling to get their feet in the door.
Switzerland's UBS, which aims to cover 100 mainland companies by year-end, has been the most aggressive in establishing a China presence.
The country's A-share market is closed except to local and select foreign investors under the landmark Qualified Foreign Institutional Investor (QFII) scheme.
New York-based J.P. Morgan won a $50 million QFII quota in November, which admits it into China's US $500 billion stock markets and permits trading in treasuries and corporate bonds.
J.P. Morgan aims to have ten to 15 analysts in China by the end of 2004.
Frank Gong, who was named head of China research and chief economist for the country last month, will be joined in Shanghai by Choon-Ming Tan (from Singapore), Jesse Friedlander, Milton Lim and Vicki Kalb (from Hong Kong).
Frank Li, who covers oil and gas and autos, is also based in Shanghai.
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