Originally from: https://intrepidsourcing.com/retreat-in-shanghai/
Chinese stocks in Shanghai are poised for a temporary retreat after their valuation premium over Hong Kong-traded counterparts surged to a more than 5-year high based. In addition, the Shanghai Composite Index, comprised mainly of yuan-denominated A shares, is valued at about 12 times estimated earnings after surging 34 % in the past 2 months.
Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said by phone Dec. 30 “We would look for a pause in the A shares and probably even a decline, a pullback that we would consider as healthy”. More important is that the persistent discount demonstrates it is a good buying opportunity presently.
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