China’s main stock exchange has criticised a major investment bank for “misleading” investors in an equity research report that predicted a big price rise for Kweichow Moutai, the luxury spirits producer whose stock has been one the year’s best performers.
The unusual callout by the government-controlled bourse highlights regulators’ worry over asset bubbles following the stock market’s disastrous boom-bust cycle in 2015. President Xi Jinping has said that controlling financial risk is a top priority this year.
Shenzhen-based Essence Securities “did not explain sources or evidence” for its forecast in a November 16 report that Moutai’s stock price would rise to Rmb900 from its closing level of Rmb688 the previous day, the Shanghai Stock Exchange said in a letter to Essence. The report “may be misleading to investors”, the letter added.