Editorial (Op-Ed) by Mr. Nasar Hayat – Food and Agriculture Organization of the United Nations Representative in the Lao People’s Democratic Republic, Mr. Nasar Hayat.
Laos Authorizes Use of Rapid Covid Tests
Laos has now authorized the use of rapid Covid-19 tests which were previously prohibited.
Laos Records 434 New Cases of Covid-19 Across 11 Provinces
Large caseloads of Covid-19 have been confirmed again across Laos and in the nation’s capital again today.
“Finetic” Launched Self-Developed Investment Analysis System on the Intelligent Stock Selection Platform
Enhanced AI and Machine Learning Functions Enable Users to Gain More from Precise Decision in Stock Selection and Investment in the Hong Kong and U.S Stock Markets
HONG KONG SAR – Media OutReach – 24 September 2021 – Finetic, a Hong Kong-based intelligent stock selection and investment education platform has developed its own AI-assisted investment analysis system, which provides weekly picks of quality stocks in major global markets, including Hong Kong, China and the U.S.. The selection is made by machine-learning analysis of the most up-to-date data of about 2,500 listed companies in Hong Kong, in conjunction with technical analysis as well as review of a unique combination of the factors affecting company stock performance.
HO Man Ho, Percival, Founder and CEO of Finetic
Finetic’s automatic selection process helps users avoid emotional decision-making and speed up the investment research process contributing to a more profitable outcome in stock investment. Given the unpredictability of the stock market, it takes a long time for individual investors to develop and practice investment skills. Finetic is also offering educational tools and guidance that can simplify the learning curve and further increase the return on investment.
Relaunch of Enhanced System and Algorithm
Mr. Ho Man-ho, Percival, Founder of Finetic and an experienced investor, created a stock analysis program known as Percival Core (the “system”) in 2005. The system collected, analysed and quantified basic and technical (price/volume) data of all Hong Kong stocks. The outcome of the process is a selection of “high-growth stocks”, which have a strong foundation and technical characteristics (high potential in substantial price surges). The system has recently been improved with AI components allowing for analysis of even more data and correlations as well as self-learning for better investment outcomes. Apart from data analysis, the improvements allow pattern recognition (including cup and handle, double-bottom, and bottom flat patterns), giving references to users for research and execution of precise investment strategies.
Percival said that thanks to the system, he has been able to maintain his capital strength for stock investment over the past 16 years, and managed to avoid the impacts of the 2008 financial crisis. In view of Percival Core’s performance, from 2018 onwards, Percival started licensing the system-generated stock selection results then known as Amelia and Swing to third party distributors. In early 2021, Percival stopped licensing the results to third parties due to differences over cooperation terms.
However, many users still wanted the stock selection results. In response to popular demand, Percival founded Finetic Ltd., a new intelligent stock selection platform through which the Percival Core system was relaunched into the market in May 2021. Apart from technical design and user experience enhancements, an investor education component directly supervised by Percival has been added to better facilitate users to make profits from investing in quality and profitable stocks.
Finetic Chief of Staff Virginia Chan said “The Sunday Club webinars hosted by Percival on the platform are well received by our members. At the events, members can acquire stock investment basics from Percival’s experience sharing and insights. Participants can also have their investment-related questions addressed.”
Enhanced Functions to Optimise Stock Selection Precision
Finetic has further upgraded the system by introducing a “Reinforcement Learning” algorithm – creating a complex environment for the AI system to nurture its self-learning capability in the volatile stock market. Percival has also equipped Finetic with a ‘supercomputer’ (data science workstation) costing over US$25,000 to train the AI system to better perform stock selection. The “Reinforcement Learning” algorithm has the capability of outsmarting its designer and ideation.
By receiving AI-recognised ‘rewards’ whenever Percival Core identifies good stocks, the AI learns from its actions. Through simulated transactions and a track record of stock picks that go through a price surge, the system begins to self-learn and discover the requisite parameters of stocks with explosive growth potential.
Finetic is currently applying this advanced technology to the research of stock buy and sell points and is near the final testing phase. Once finalized, Percival Core will be able to find stocks with growth potential as well as their best buy and sell points, which will significantly increase the chance of positive investment returns. Successful deployment of this technology will also provide Finetic with more favorable conditions and advantages to develop in the B2B market.
In November, Finetic will participate in Fintech Week 2021, which is co-organised by the Hong Kong Financial Services and the Treasury Bureau and InvestHK. At the exhibition, Finetic will showcase a range of products and services, along with the artificial intelligence pattern recognition technology. That will be an occasion for finance professionals and the investing public to learn more about Finetic’s technologies and business development.
Looking to Enter the International Market
The Percival Core engine has seen continuous improvements since 2005, weathering numerous market shocks including the 2008 financial crisis and COVID-19. Finetic is proud to develop in the well regulated and organised financial sector of Hong Kong, and is eager to take its experience forward to service other international markets.
“Finetic has a complete and effective stock selection system catering for the Hong Kong, China A-Share and U.S. stock markets. Its offerings include a complete list of quality stock selections, market analysis and investor tools. In the future, it is planning to further expand its offerings and global audience. Stock selection services for different countries/regions such as Taiwan, Singapore, and the United Kingdom will be launched subsequently in short succession.”
About Finetic
Finetic was founded in March 2021 as a stock selection service provider and investor education centre offering “Simple but Powerful” solutions to investors. “Finetic” connotes the combination of “Fintech”, “Kinetic” and “Fanatic” (Percival’s energy and passion for stock investment). Finetic’s stock lists and tools are designed to help investors save time, simplify the investment process, ease the selection of quality stocks and increase win rates. Whether you are a beginner or a seasoned investor, you will be able to reap rewards from the unpredictable stock market.
https://www.facebook.com/fineticai
#Finetic
About the Founder and CEO of Finetic
Percival Ho, Founder and CEO of Finetic, is an Electrical and Electronic Engineering graduate from the University of Hong Kong and a holder of a Master’s Degree in Information Engineering from the Chinese University of Hong Kong (Dean’s recognition list). Percival initially worked as a computer programmer at a major bank and became interested in stock investment. He started using computer programs to assist in stock selection and attended a number of courses on technical analysis of stock investment, including training by William O’Neil, a noted stockbroker and writer in the United States. He then pursued studies on Machine Learning and Artificial Intelligence (computer science) at the University of Birmingham and was awarded a Master’s degree with first-class honors.
In 2005 he created Percival Core, a stock selection system. Since then, he has been working relentlessly on the research and development of the system’s AI-assisted stock selection module which combines cutting-edge AI technology and investment techniques.
“Finetic” Launched Self-Developed Investment Analysis System on the Intelligent Stock Selection Platform
Enhanced AI and Machine Learning Functions Enable Users to Gain More from Precise Decision in Stock Selection and Investment in the Hong Kong and U.S Stock Markets
HONG KONG SAR – Media OutReach – 24 September 2021 – Finetic, a Hong Kong-based intelligent stock selection and investment education platform has developed its own AI-assisted investment analysis system, which provides weekly picks of quality stocks in major global markets, including Hong Kong, China and the U.S.. The selection is made by machine-learning analysis of the most up-to-date data of about 2,500 listed companies in Hong Kong, in conjunction with technical analysis as well as review of a unique combination of the factors affecting company stock performance.
HO Man Ho, Percival, Founder and CEO of Finetic
Finetic’s automatic selection process helps users avoid emotional decision-making and speed up the investment research process contributing to a more profitable outcome in stock investment. Given the unpredictability of the stock market, it takes a long time for individual investors to develop and practice investment skills. Finetic is also offering educational tools and guidance that can simplify the learning curve and further increase the return on investment.
Relaunch of Enhanced System and Algorithm
Mr. Ho Man-ho, Percival, Founder of Finetic and an experienced investor, created a stock analysis program known as Percival Core (the “system”) in 2005. The system collected, analysed and quantified basic and technical (price/volume) data of all Hong Kong stocks. The outcome of the process is a selection of “high-growth stocks”, which have a strong foundation and technical characteristics (high potential in substantial price surges). The system has recently been improved with AI components allowing for analysis of even more data and correlations as well as self-learning for better investment outcomes. Apart from data analysis, the improvements allow pattern recognition (including cup and handle, double-bottom, and bottom flat patterns), giving references to users for research and execution of precise investment strategies.
Percival said that thanks to the system, he has been able to maintain his capital strength for stock investment over the past 16 years, and managed to avoid the impacts of the 2008 financial crisis. In view of Percival Core’s performance, from 2018 onwards, Percival started licensing the system-generated stock selection results then known as Amelia and Swing to third party distributors. In early 2021, Percival stopped licensing the results to third parties due to differences over cooperation terms.
However, many users still wanted the stock selection results. In response to popular demand, Percival founded Finetic Ltd., a new intelligent stock selection platform through which the Percival Core system was relaunched into the market in May 2021. Apart from technical design and user experience enhancements, an investor education component directly supervised by Percival has been added to better facilitate users to make profits from investing in quality and profitable stocks.
Finetic Chief of Staff Virginia Chan said “The Sunday Club webinars hosted by Percival on the platform are well received by our members. At the events, members can acquire stock investment basics from Percival’s experience sharing and insights. Participants can also have their investment-related questions addressed.”
Enhanced Functions to Optimise Stock Selection Precision
Finetic has further upgraded the system by introducing a “Reinforcement Learning” algorithm – creating a complex environment for the AI system to nurture its self-learning capability in the volatile stock market. Percival has also equipped Finetic with a ‘supercomputer’ (data science workstation) costing over US$25,000 to train the AI system to better perform stock selection. The “Reinforcement Learning” algorithm has the capability of outsmarting its designer and ideation.
By receiving AI-recognised ‘rewards’ whenever Percival Core identifies good stocks, the AI learns from its actions. Through simulated transactions and a track record of stock picks that go through a price surge, the system begins to self-learn and discover the requisite parameters of stocks with explosive growth potential.
Finetic is currently applying this advanced technology to the research of stock buy and sell points and is near the final testing phase. Once finalized, Percival Core will be able to find stocks with growth potential as well as their best buy and sell points, which will significantly increase the chance of positive investment returns. Successful deployment of this technology will also provide Finetic with more favorable conditions and advantages to develop in the B2B market.
In November, Finetic will participate in Fintech Week 2021, which is co-organised by the Hong Kong Financial Services and the Treasury Bureau and InvestHK. At the exhibition, Finetic will showcase a range of products and services, along with the artificial intelligence pattern recognition technology. That will be an occasion for finance professionals and the investing public to learn more about Finetic’s technologies and business development.
Looking to Enter the International Market
The Percival Core engine has seen continuous improvements since 2005, weathering numerous market shocks including the 2008 financial crisis and COVID-19. Finetic is proud to develop in the well regulated and organised financial sector of Hong Kong, and is eager to take its experience forward to service other international markets.
“Finetic has a complete and effective stock selection system catering for the Hong Kong, China A-Share and U.S. stock markets. Its offerings include a complete list of quality stock selections, market analysis and investor tools. In the future, it is planning to further expand its offerings and global audience. Stock selection services for different countries/regions such as Taiwan, Singapore, and the United Kingdom will be launched subsequently in short succession.”
About Finetic
Finetic was founded in March 2021 as a stock selection service provider and investor education centre offering “Simple but Powerful” solutions to investors. “Finetic” connotes the combination of “Fintech”, “Kinetic” and “Fanatic” (Percival’s energy and passion for stock investment). Finetic’s stock lists and tools are designed to help investors save time, simplify the investment process, ease the selection of quality stocks and increase win rates. Whether you are a beginner or a seasoned investor, you will be able to reap rewards from the unpredictable stock market.
https://www.facebook.com/fineticai
#Finetic
About the Founder and CEO of Finetic
Percival Ho, Founder and CEO of Finetic, is an Electrical and Electronic Engineering graduate from the University of Hong Kong and a holder of a Master’s Degree in Information Engineering from the Chinese University of Hong Kong (Dean’s recognition list). Percival initially worked as a computer programmer at a major bank and became interested in stock investment. He started using computer programs to assist in stock selection and attended a number of courses on technical analysis of stock investment, including training by William O’Neil, a noted stockbroker and writer in the United States. He then pursued studies on Machine Learning and Artificial Intelligence (computer science) at the University of Birmingham and was awarded a Master’s degree with first-class honors.
In 2005 he created Percival Core, a stock selection system. Since then, he has been working relentlessly on the research and development of the system’s AI-assisted stock selection module which combines cutting-edge AI technology and investment techniques.
Police Officers Die in Road Accident in Northern Laos
Three police officers were killed and two injured when the vehicle in which they were traveling went over a cliff in Xieng Khouang Province.
Laos Assumes Position as Vice-President of 76th UN General Assembly Session
Laos has taken office as the Vice-President of the 76th Session of the United Nations General Assembly, which began in New York on Wednesday.
CUHK Business School Research Finds the Inconsistent ESG Scores from Different Rating Agencies Decreased Investor Demand for Green Stocks
HONG KONG SAR – Media OutReach – 24 September 2021 – Sustainable investing, once viewed as an outlier maybe only a decade ago, has never been more popular. To put things into perspective, sustainable funds in the U.S. attracted record investment of nearly US$2 trillion in the first quarter of 2021, according to industry data provider Morningstar. As demand for ESG (environmental, social and governance) investing grows, so does the need for better quality ESG performance data. However, a recent research study has found that ESG ratings of firms provided by different agencies can be confusing to investors and may be holding back the sustainable investment sector from realising its full potential.
It is not uncommon for the ratings of different ESG rating providers to be widely dissimilar. For example, Tesla Inc. is rated average by MSCI ESG ratings but categorised as high risk by Sustainalytics. (source: iStock)
Sustainable investing, also known as ESG investing or socially responsible investing, is an approach that asks investors to consider a company’s ESG profile alongside its financials when making an investment decision. Such additional factors include everything from a company’s energy use, waste and pollution, to its working conditions, participation in its community and diversity in its board of directors. Because of these considerations, it is not unusual for sustainability-minded investors to set maximum thresholds or even shy away altogether from less “ethical” sectors such as coal, defence, gaming or tobacco.
Perhaps due to its relatively recent arrival in the finance world – the term ESG investing itself was first coined by the U.N. Global Compact as part of a landmark 2004 study titled Who Cares Wins, there is no universal standard nor a commonly accepted methodology for calculating ESG ratings among different agencies. According to KPMG, there are around 30 major ESG data providers worldwide in 2020. These rating agencies usually adopt different measurements when constructing their ESG scores. It is not uncommon for them to provide different ESG ratings for the same company. For example, Tesla Inc. is rated average by MSCI ESG ratings but categorised as high risk by Sustainalytics.
The new study Sustainable Investing with ESG Rating Uncertainty was co-conducted by Si Cheng, Assistant Professor in the Department of Finance at The Chinese University of Hong Kong (CUHK) Business School, Prof. Doron Avramov at IDC Herzliya, Prof. Abraham Lioui at EDHEC Business School and Prof. Andrea Tarelli at the Catholic University of Milan.
In their study, Prof. Cheng and her co-authors tested their hypothesis using U.S. stocks from 2002 to 2019 and examined the ratings from six major ESG rating providers – Asset4 (Refinitiv), MSCI KLD, MSCI IVA, Bloomberg, Sustainalytics and RobecoSAM. In line with existing studies on ESG ratings, the research team also found considerable disparity across different ESG rating providers. They found that the confusion in the different ratings provided by the ESG rating agencies made sustainable investing riskier and decreased investor demand for stocks.
Ratings Disagreement
“Generally, because there’s a lack of consensus in reporting, measuring and interpreting ESG information, there’s a lot of ESG data out there on firms and these can both be overwhelming and perplexing. That’s why it can be difficult for investors to ferret out the ‘true colour’ of a firm, whether that be, green, brown, or something in between,” Prof. Cheng says. “That in turn feeds back into investor appetite in sustainable investment. If an investor is looking for ESG plays and they’re not clear about the sustainability of the stock they’re about to sink money into, then they obviously are going to think twice before proceeding.”
Using data from the six ESG rating providers, the researchers generated an ESG score for each stock, as well as a score to measure the difference in the ESG scores between the six agencies in order to calculate the level of uncertainty in ESG ratings. According to the results, the average rating correlation is only 0.48, and the average ESG rating uncertainty is 0.18. For perspective, this means that a company could be ranked in the bottom third by one data provider but be ranked in the 59th percentile by another.
Using these scores, the researchers looked at how inconsistency in ESG ratings affected whether an institutional owner would invest in a particular stock, and the impact on the stock’s actual performance on the market. The study considered three distinct types of investors. The first type are organisations such as pension funds as well as university and foundation endowments, which constrain their investments to socially acceptable norms (such as by engaging in socially responsible investing) when compared with other institutional investors which are more interested in generating financial returns, such as hedge funds.
The study found that institutions which were more constrained by investment norms were indeed in favour of greener firms, but were less likely to hold green stocks when there is a high level of inconsistency over ESG ratings. For companies with the highest ESG scores, norm-constrained institutions on average hold 22.8 percent of their shares, but only when the ratings put out by the different ESG agencies were in high agreement. When the correlation in ESG ratings between the different ratings agencies were low, institutional ownership level dropped to 18.1 percent.
In contrast, hedge funds invest more in brown stocks on average, and rating uncertainty mostly affects their holdings for brown stocks. For companies with the lowest ESG scores in the study, the researchers found that hedge funds owned an average of 15.7 percent of shares when there was high agreement between the ESG scores from different ratings agencies. This again dropped to 13 percent when the correlation in the ratings from different agencies diverged. The authors conclude that rating uncertainty matters the most for investors in their preferred investment universe.
And while companies which focus on improving their ESG performance are expected to deliver lower investment returns because they provide nonpecuniary benefits to investors, the study found that this was not always the case. Specifically, it found that brown stocks always outperform green stocks only when ESG ratings ambivalence is low. When there is a high level of agreement between the ratings of different ESG rating agencies, brown stocks surpass green stocks by 0.59 percent per month in absolute returns and 0.40 percent per month in risk-adjusted returns. But when inconsistency between ESG ratings rises, there is no clear relation between a company’s ESG leanings and their stock performance.
Market Implications
Lastly, the study implies that ambiguity in ESG ratings has an overall impact on the entire stock market. In particular, a higher level of ratings confusion is linked with higher market premium, as well as lower stock market participation and lower economic welfare for ESG-sensitive investors.
Green stocks are harmed the most when ESG rating confusion is high. Firms which take a more responsible path in their operations are disproportionately penalized if ratings agencies fail to agree on their ESG profile. This in turn would further limit their ability to make capital investment and generate a real social impact.
“In the face of uncertainty over a company’s ESG profile, ESG-sensitive investors are just as likely to stop making ESG investments or engage in corporate ESG matters,” Prof. Cheng adds.
Overall, the study results have significant implications for asset allocation, investor welfare, and asset pricing. In order to minimise the downside brought to ESG investing by rating inconsistency, Prof. Cheng and her co-authors suggest companies disclose more candid reports on their ESG performance. For ESG rating providers, the researchers advise them to further release and explain their measurement practices and methodologies. Furthermore, they argue that more public discussion on how to measure ESG performance of companies should help to elevate the quality of ESG ratings.
“Sustainable investing is on the rise. Therefore, the overall impact of ESG rating inconsistency will become even more prominent,” Prof. Cheng says.
Reference:
Avramov, Doron and Cheng, Si and Lioui, Abraham and Tarelli, Andrea, Sustainable Investing with ESG Rating Uncertainty (July 26, 2021). Available at SSRN: https://ssrn.com/abstract=3711218 or https://dx.doi.org/10.2139/ssrn.3711218
This article was first published in the China Business Knowledge (CBK) website by CUHK Business School: https://bit.ly/3kq2Y12.
About CUHK Business School
CUHK Business School comprises two schools – Accountancy and Hotel and Tourism Management – and four departments – Decision Sciences and Managerial Economics, Finance, Management and Marketing. Established in Hong Kong in 1963, it is the first business school to offer BBA, MBA and Executive MBA programmes in the region. Today, CUHK Business School offers 9 undergraduate programmes and 18 graduate programmes including MBA, EMBA, Master, MSc, MPhil and Ph.D. The School currently has more than 4,600 undergraduate and postgraduate students from 20+ countries/regions.
In the Financial Times Executive MBA ranking 2020, CUHK EMBA is ranked 15th in the world. In FT‘s 2021 Global MBA Ranking, CUHK MBA is ranked 48th. CUHK Business School has the largest number of business alumni (40,000+) among universities/business schools in Hong Kong – many of whom are key business leaders.
More information is available at http://www.bschool.cuhk.edu.hk or by connecting with CUHK Business School on:
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