Underwriting's the game, underwriters should take some blame.

(From South China Morning Post)

"Regulation on pre-deal research reports is a complicated issue."

Peter Au-Yang Cheong-yan,

Chief operating officer,

Securities and Futures Commission

NO, IT IS NOT, Mr Au-Yang. There are some very good and simple reasons for stopping investment banks from publishing research reports that lavish praise on new issues they are bringing to the market.

Let us consider the traditional way that a new stock gets a listing. When the directors of a company decide to go public they hire a corporate financier (now called investment bank) to arrange it for them. He guides them through the process of applying, publishing a prospectus, …