Tag Archives: equities

Chinese vs US Equity Markets: A 5-Year View

Shanghai Composite Index vs S&P 500, 5-year view. Source: Bloomberg

ONE PERSPECTIVE ON the recent slump in equity prices on the Shanghai exchange (chart courtesy of Bloomberg). Where’s the real bubble?

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CSCEC Gets It IPO Away With Ease

China State Construction Engineering Corp. (CSCEC) got its IPO out at 4.18 yuan a share, top of the indicated range, and raising 50 billion yuan ($7.3 billion) for 40% of the A-shares. That values  the company at 125 billion yuan, or 51.3 times earnings on a fully diluted basis. With the offering oversubscribed 35 times, this Bystander still thinks this a rich price with bubbly undertones.

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Bubble Burst

Chinese stocks have risen more than those on any other stock market this year, according to Forbes.com‘s Global Markets Scorecard. 

Its analysis says the Shanghai Composite Index has risen 11.5.8% so far this year and Hong Kong’s Hang Seng Composite has risen 40.1%. Only Brazil’s Bovespa (up 57.8%) and India’s BSE 100 (up 42.6%) are anywhere close.

Year on year, the Shanghai market is up 236.3% and Hong Kong 68.5%. Nuts.

It is a weight of money bubble. When the flood of money abates, the market will tumble.

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