About 51 percent of stock investors refer to financial reports before making trading decisions, Hong Kong Securities & Futures Commission Stock Investor Survey shows.

Conducted from September to February, the survey studied the behavior of 500 retail investors in stock investment and the factors in selecting stocks and making trading decisions, according to a government press release on Friday.

About 51 percent of the investors surveyed said they referred to financial reports before making stock trading decisions, and 48. 4 percent relied on company announcements.

About the same proportion of stock investors counted on stock commentators' recommendations on television, radio or newspapers ( 48.2 percent) and media reports (47.6 percent) for investment decisions.

When asked about their understanding of a listed company before buying its shares, 76 percent of stock investors said they knew about the company's business nature, 67.2 percent had monitored the stock's price trend and 65 percent were interested in the company's prospects. About 27 percent knew about the company's management and only 16.4 percent understood the treatment of minority shareholders.

When reviewing the performance of their stock investments in a defined six-month period, 53.4 percent of stock investors said they made profits, 21.4 percent suffered losses, 0.2 percent broke even and 25 percent said they did not know or were not sure.

While there was no statistically significant difference between the amount of profit made by stock investors who read financial reports and that made by those who did not, stock investors who did not read financial reports suffered a bigger trading loss (25. 2 percent) than those who did (16 percent).

Commission Chairman Martin Wheatley said it is important for investors to do their homework to analyze the company's fundamentals before committing their money.

"The survey reveals that many stock investors rely on media reports and stock commentators' recommendations in making trading decisions. Investors must be aware that given the constraints in airtime or column space, the assumptions behind investment research reports and recommendations are often not included," he said.

He suggested that investors should consider carefully whether those recommendations are suitable for them.

Source: Xinhua