The Chinese equity market is characterized by booms and busts. Since 1996, the upward and downward movements in the market has been violent. For example, during the Global Financial Crisis of 2008-09 the MSCI China Index lost 65% of its value. From 2004 thru the peak in 2008, the index soared by an astonishing 757%. …
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A country’s economic growth as measured by GDP and stock market returns are not positively related to each other. Economic growth figures show what happened with the economy during a period and is a lagging indicator. On the other hand, stock returns are driven by a variety of factors including expectations of future earnings of …
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Professor John Ross is Senior Fellow at Chongyang Institute for Financial Studies, Renmin University of China and runs a blog called Key Trends in Globalisation. His work regularly appears in Chinese and Western media. In an article posted yesterday he argues that economic hard landings have occurred in the past in Western economies and not in China. In …
Investing in emerging markets involves more risk than developed markets. Among the major emerging markets, the Chinese equity market is considered by some investors as one huge casino. This year the Shanghai Composite Composite Index is down about 19% year-to-date. Last year Chinese stocks had a tumultuous year to say the least. The following chart shows …
Continue reading ‘Is China Stock Market A Colossal Casino?’ »
Just a few months ago the Chinese equity market plunged dramatically almost overnight. Global markets followed suit as fears of a collapse in China’s economy and equity markets would lead the world into a depression. Stocks of developed world companies which have nothing to China were also trashed during the selloff. However a recent Journal …