On the last three occasions the price-to-book ratio has been this low, A shares have produced gains averaging 55 per cent, says Andreas Utermann, CEO of AllianzGI
The relaxation of restrictions on foreign investment will also help the market bounce back, he says
The price-to-book ratio for the MSCI China A-share index has started the year at 1.54 times, close to its historic low of 1.47 times in 2014.
“The Chinese government has introduced a lot of counter-cyclical measures such as monetary easing and tax cuts to support economic growth,” he said.
The net buying of A shares by international investors through the two stock connect schemes last year was up 50 per cent to a record US$44.7 billion, according to a BNP Paribas report released earlier this month.
They accounted for 5 to 10 per cent of the daily turnover in 2018, compared with just 1 per cent at the beginning of 2017, the BNP report said.
Source: SCMP
https://www.scmp.com/business/banking-f ... -next-year