Valuations, valuations, valuations:
Based on the P/B chart, the Hang Seng Index is trading at the cheaper end of its range but not yet at levels seen in 2016.￼
People are far more bearish than just 6 months ago – with highflying companies like Tencent bearing the brunt of the sell-off. Expectations earlier in the year that the trade war would be resolved in earlier discussions proved wishful thinking as Trump ripped apart earlier agreements negotiated by his staff.
A subject which I will touch upon more in a subsequent post is that there’s a lot happening behind the scenes too than just the trade war which has become a boogyman of sorts.
China had been embarking on a dramatic deleveraging campaign. Casualties included firms like Anbang which went on a overseas spending binge (former head of Anbang has been jailed), …