Monday, June 17, 2013

Chinese Equity Valuation Approaching Lowest levels Since October 2011

China has again depressed Chinese equity valuations. Price-to-book ratio has approached the lowest reading since the height of the euro zone debt crisis in October 2011. Historically, such low valuation was typically followed by a mean reverting rally, and an overall 3.4 percent dividend yield.
















Source: Bloomberg, U.S. Global    Click on the image for larger picture.

A rally is due that takes the Price/Book ratio back to the mean ?

Geir Solem

Elliott Wave Technician
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