YOU GET WHAT YOU PAY FOR
The bad news is that most Internet financial websites are no longer free. The good news is that the quality of the data and analysis of a service usually goes up when you pay for it
By JASPER MOISEIWITSCH
Flashback to March last year. Puru Saxena, a Hong Kong-based investment adviser, was getting e-mailed tips about a small listed Internet company called eSun Holdings. According to the cyber grapevine, super trader George Soros was interested in the company. Saxena didn't bite, but some friends on the same mailing list took a punt. "They saw eSun climb from HK$1.60 to HK$3.40 and celebrated by getting pissed," he recalls. "But when they got up the next morning, the stock fell out of bed. Soros wasn't buying, after all." The company is still operating, but eSun is currently trading at just HK$0.77 per share.
Saxena's friends have also sobered up. These days, they download charts, company reports and other data once used only by institutional investors before making investment decisions. "There were a lot of chat rooms before, which were generating all the noise," says day trader Paul Heffner, CEO of financial software company CFN Asia. "But there's a massive consolidation going on out there and [bulletin boards and e-mail tipsters] are going out of business. The really poor sites are dying, but the good sites are getting better." The catch: better quality comes at a price. Many previously free financial websites have begun to charge for their information.
Last week, financial-news-and-commentary site started charging $45 per quarter for its services. Popular website e-finet.com, which specializes in Chinese and Hong Kong markets, is offering real-time stock quotes, research and commentary for $12.80 every three months. "There's no more free content," says Kevin Scully, managing director of Net Research which charges $11 a month for reports on the fundamentals and prospects of small- and medium-cap stocks in Singapore and Malaysia. "Because of the collapse of advertising revenue, all the portals are now charging."
It's not necessarily a bad thing. The discipline of the market wonderfully concentrates a webmaster's mind about keeping content up to date. "Some free sites are unreliable," says Singapore-based consultant Ross MacKenzie, who trades actively on the Net. "Every few days, they would show a market is closed, when in fact I know it is open." A paid-for site can also provide more useful data. For example, free sites offer only delayed stock quotes, which stock exchanges make available to data providers without charge. Bourses levy fees on real-time prices and information like bid and asking prices. "Public sites have yesterday's information," says Heffner. "If you trade on their advice, you've got a 50-50 chance of making money. Those are terrible odds."
But there are still some valuable freebies out there. Almost all of Asia's stock exchanges publish the financial results of listed companies, chart their stock prices and carry other primary data.
David Webb, editor of non-profit market commentary page webb-site.com and a personal trader himself, advises retail investors to check these sites. "Other people's commentary and opinions form a useful overlay to fundamental information, but one should always cross-reference to the underlying data," he says. "If you're looking at supermarkets, you should look at retail sales figures." The bourses in Hong Kong and Singapore both maintain particularly valuable sites (see table, page 56).
Most corporations also have a Net presence. They try to spin everything, of course, but investors can mine their database for financial results and other objective data. The homepages of India's Infosys Technologies, Hong Kong's HSBC and Taiwan Semiconductor Manufacturing Corp. are especially well designed. Market-sensitive information is often announced on corporate websites. In Hong Kong, notes Credit Suisse First Boston Internet analyst Matt Adams, newly amended regulations require firms to release data to institutional investors and the general public at the same time. "For instance, if you hold chinadotcom stock, you can watch the webcast of its annual results," he says.
Other free sites take the raw data from bourses and company websites and repackage them for ease of use. Annual Report posts the latest financial statements of Hong Kong-listed companies and the prospectus of firms doing an initial public offering. Investors can also access research reports by selected brokerages after these have been released to their clients. Use Annual report for free while you still can, though. Similar sites have already abandoned the freebie model. One example is Hoovers.com, which covers mostly U.S.-listed firms but also has information on the larger Asian companies. It now charges $199.95 annually.
Most free sites have delayed stock quotes and some like Quamnet.com in Hong Kong have real-time prices — but only for one stock at a time. The serious trader requires real-time, streaming quotes and value-added data like broker queues, which identify who the buyers and sellers are and the volume of their trades. AAstocks.com, which covers the U.S., China and Hong Kong, and Quote power.com (Hong Kong, the Philippines and Thailand) can turn your computer into a constantly updated ticker tape, assuming you have a broadband connection to the Net. Both charge for the service, depending on the market you want to follow. Quote power, for example, charges $29 a month for Philippine data.