ashare-correction-how-much-more-to-go

A-share correction: How much more to go?

Given that the fundamentals of listed Chinese companies are good, the long-term signs for the A-share market are also good.
By Chi Lo
April 13, 2008
The A-share price correction since October 2007 resembles the bursting of the red-chip bubble in Hong Kong in the mid-1990s. Despite the cyclical correction, the strong long-term fundamentals behind Chinese stocks are still intact. Economic and statistical indicators suggest that the price correction in A-shares is probably in an advanced stage. But price undershoot is still possible in the short-term before a bottom is found. A 20% fall will take the A-share average trailing PE ratio down to the one-standard-deviation undershoot level.

Red-chip bubble dTja vu all over again
The A-share price correction that started in October 2007 resembles the bursting of Hong KongÆs Red-chip bubble between 1994 and 1999 Chart 1. The correction...
¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at [email protected], or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at [email protected], or +(852) 2122 5222