It's 'Price-to-Whatever' For Chinese Stocks

摘要

Signs of a Chinese stock market bubble are visible just about everywhere Hao Hong looks. Hong, the chief China strategist at investment bank Bocom International Holdings, points to soaring price-earnings ratios, the shrinking yield advantage that stocks offer over bonds, and the 34 percent premium of stocks listed on mainland exchanges over almost identical shares in Hong Kong. So what's his advice? Keep buying, of course. "Our traditional market models may not be able to capture the full picture," Hong says a few days after spelling out his argument in a March 20 report titled Price-to-Whatever Ratio: A Bubble Scenario.