Jim Armitage: Most experts won't touch China with a bargepole
US Outlook Mark Makepeace, chief executive of FTSE, is clearly a glass-half-full kind of chap. He's been in Hong Kong this week, drumming up business for firms to raise money through listing on his indices, and a jolly good job I'm sure he's doing.
He tells us that Chinese companies will be joining global equity benchmarks in droves in the coming three to five years as reforms to business practices mean they are now becoming safer places to invest.
Really? From what fund managers tell me, China remains mostly untouchable. Widespread fraud, near non-existent corporate governance and opaque accounts mean Chinese companies are strictly in the not-with-a-bargepole category for all but the most specialist fund managers. Even the cleanest of firms are still deemed high risk.
Forget China's tiger economy, its stock market lagged the rest of the region last year. And of the 154 businesses that floated there in 2012, more than 60 are trading below their listing price.
That's not to say that Chinese stock market officials aren't trying. They have been beefing up the regulatory system around listed companies in an attempt to kick out the dross. The China Securities Regulatory Commission staged a global roadshow recently to drum up support.
But China remains, and will remain, an unpredictable and volatile place for many firms to do business. Their share prices and dividend payments will reflect that.
If the country's companies do join the FTSE's indices around the world, many a tracker fund will have to start investing in them.
For investment managers looking to pick individual stocks, I wonder how easy they will find doing adequate, trustworthy due diligence before risking their – or our – cash? I suspect it will be nigh on impossible.
Matt Smith is set to join cast of Jane Austen classic - with a twist
Olympic diver has made his modelling debut for Adidas
- 1 Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
- 2 Scottish independence: Learn from Quebec's mistakes and beware of promises. Vote Yes.
- 3 'Necrophilia-obsessed' girl among double murder accused in three-way sex case
- 4 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 5 Revealed after 75 years of secrecy: 'Fifi' the glamorous WW2 special agent who tested British spies' resolve
Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
Scottish independence: Final opinion polls show undecided voters could swing result either way
Isis release 'Flames of War' video warning Obama of attacks troops could face in Iraq
Jennifer Lawrence 'naked sex video' will be leaked next, threatens 4Chan celebrity photo hacker
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Portuguese academic says British are 'filthy, violent and drunk'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...