Playing the Chinese stock market can be likened to entering a battlefield with a blindfold over one’s eyes, even if the player is a native. For one, the aforementioned war zone is swarmed with retail investors — individuals who buy and sell according to emotional fears and hopes. Such behaviour, coupled with uninformed assumptions, can cause the scene to rise and fall quite erratically, and create unnecessary waves.
According to South China Morning Post, retail investors have been lamenting about “inefficient regulations” and “poor earnings by listed firms”, further noting that small investors “are always the losers”. Additionally, more than seven million retail investors have left the Chinese stock market since 2010, read the same report. Instead of looking to invest when the market is declining, these small-time buyers are “chasing market rallies”.
Meet iMaibo, a Guangzhou-based startup that aims to help Chinese stock marketeers better understand how a stock market really functions. Founded in 2012, the company does this through its web platform and mobile apps, available on Android and iOS devices, which reveal market sentiment through a “sentiment index”.
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After all, a stock market runs on mere sentiment. By analysing events and chatters on social media sites like Weibo, iMaibo is able to predict and allow its users — more than 400,000 of them — to make informed decisions.
Furthermore, the site also allows inexperienced retail investors to seek advice from veterans. These users look up to some 100 investment professionals, who dole out advice and give insights to the amateur stock market player.
According to Jonathan Cai, VP, Business Development, iMaibo, 99 per cent of all users hail from within China. Given its predominantly Chinese crowd, most information on the app and the web platform is in Mandarin. Cai added that the firm is looking to garner a million users by the end of this year.
It is inevitable that e27 will compare iMaibo to TradeHero, a Singapore-based trade simulation app which bagged US$10 million to enter China. However, the two cannot be more different.
While TradeHero offers the typical stock market enthusiast, regardless of location, a chance to dabble without getting burned, iMaibo is a more professional alternative for those looking to heed advice from experts on the local, extremely volatile Chinese stock market. Both are free-to-use platforms, which charge users an in-app fee for value-added services like tracking portfolios of investment professionals.
For the record, the startup has received an undisclosed amount of investment from a group of investors including China-based Nan Fang Media, Zhang Hai Tao, Roy Ho, Koh Boon Hwee and Tan Chin Hwee as well as Co-founder Water Cheung. The firm is currently valued at US$20 million, according to Cai.