Chinese Stock Market Valuations From a Global Perspective
In 2018, KraneShares’ parent company, China International Capital Corporation (CICC), ranked #1 in Institutional Investor’s All-China Research Category for the seventh year in a row. Their most recent report compares Chinese valuations relative to other global equity markets – Page 4 highlights compelling valuations and earnings growth, specifically in Mainland China.
- As global capital shifts from developed to emerging markets, China’s stock markets may attract more attention from overseas investors as China’s stock markets have significantly cheaper valuations relative to other major markets.
- Both Chinese off-shore and on-shore equity valuations are trading lower than emerging market averages, with 2019 earnings growth rates above the average of major emerging markets.
- In 4Q18, global equity funds began to flow from the US to emerging markets as US economic growth slowed, with inflows largely dominated by passive funds.
- In 2019, MSCI and FTSE may accelerate the inclusion of A-shares into their indexes and overseas funds may continue to increase their allocation for A-shares.
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