Portfolio investors‘ illusions about the "great China growth" story are being stripped away day by day. Instead of the Chinese market looking relatively cheap, at least by comparison with both its past and the nation‘s assumed economic growth rate, it looks seriously over-valued for two very different reasons.
The first is the least remarked, being overshadowed by the recent spate of headlines about bogus accounts and disappearing bosses. It is this. Even if one were to actually believe the published aggregate accounts of major mainland companies listed in Hong Kong and Shanghai, there is scant case for regarding this market as anything other than expensive relative to both developed markets and to some of the currently less fashionable developing countries (such as Thailand). Full story