Haiyan Li-Labbé, greater China analyst at Carmignac Gestion, highlights the many drivers that could eradicate the differences in price between local and overseas-listed Chinese companies in 2015
After a six-year bear market, the Shanghai Stock Exchange Composite (SHCOMP) index registered a performance of 53% in 2014, the best global performer of the year. Global investors remained sceptical by maintaining low weightings on Chinese equities, with overseas-listed Chinese stocks, represented by the Hang Seng China Enterprises index (HSCEI), only returning 11%. Several reasons could explain the local market's impressive rally in 2014. Firstly, valuations within the SHCOMP index were attractive, trading at 7x 2015 price-to-earnings before the rally, and Chinese banks were trading at ...
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