The InvestQuest’s View: China A-shares are currently trading at its most expensive levels compared to H-shares of the same companies, since the 2008 Financial Crisis. We see an opportunity for a convergence trade (buy H-shares, sell A-shares), with a view that a Biden win and a strong Democratic showing in the Senate / House race could be short-term catalysts. Significant outperformance of H-shares vs A-shares was also observed historically, when A-H premiums had widened to current levels previously.
Disclaimer: We initiated this
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