3 More Reasons to Rethink Your China Allocation

gary gordonGary Gordon submits:

Months ago, equity market pros pounded China mercilessly: China real estate was the next bubble to burst; inflation was spiraling out of control; and commodity stockpiling was proof-positive that China was dead in the dry-bulk shipping water.

Well, some folks had a far different perception. For instance, I spoke at the 4th annual Inside ETF Conference on Accessing Asia and China. And on February 7, live from the venue in Florida, I wrote the following:

The MSCI China Index trades at 11.5x forward earnings, the lowest forward multiple since 2004. With Hong Kong trading at nearly 18x forward earnings, the disparity is at or near a record there are plenty of reasons to keep an eye on the SPDR S&P China Fund (GXC). I expect it to drop a bit further, possibly testing its 200-day moving average. A pullback of 12%-14% from GXCs November peak is my anticipated entry


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