Charts: HK/China mega-bear market and others
17 July, 2012, 18:11. Posted by Zarathustra
Readers should be familiar with the following chart, showing that Hong Kong/China stock market bubbles burst in 2007 and continue with their prolonged bear market that are not unlike other notable stock market bubbles. In pervious cases, stock markets just virtually do nothing for a decade or even longer.
Here is the latest look at the on-going bear market. We are 5 years or so into it. Multiples are being compressed. On top of that, we also believe that Chinese corporate earnings will be depressed in the current economic model even though growth might have some chance of being maintained at moderate rate.
On a different note, here is a chart of US stocks plotted against Hang Seng Index and Shanghai Composite. As you can see, HK/China market seem to top slightly ahead of US.
Finally, we mentioned the statistics on profit warnings in Hong Kong/China market earlier. The following chart is from Goldman Sachs, which breaks down the sectors of where the profit warnings came from.
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About Zarathustra
Zarathustra: Founder and Managing Editor of Also sprach Analyst. Once an analyst, now an investor and entrepreneur. Based in Hong Kong, but Londoner at heart.