The Great Fall of China
Since October of 2007, Morgan Stanley's China Index is down 40%. This recent crash is due largely to economic weakness in the U.S., which means fewer exports from China. Despite the apparent risks, this could be the best time in years to scoop up Chinese shares.
The forward price/earnings ratio of stocks there has tumbled to about 14, about the same as in October of 2006, before the big rally got up a full head to steam.
China has one of the fastest-growing economies in the world, with near-term growth estimated at 9% to 10% a year. Over the next decade, wages in China will rise and the emerging middle class will spend more on goods and services, thus boosting corporate profits.
An investor can pick individual Chinese companies trading as ADRs or choose Chinese stock funds that offer diversification.
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The forward price/earnings ratio of stocks there has tumbled to about 14, about the same as in October of 2006, before the big rally got up a full head to steam.
China has one of the fastest-growing economies in the world, with near-term growth estimated at 9% to 10% a year. Over the next decade, wages in China will rise and the emerging middle class will spend more on goods and services, thus boosting corporate profits.
An investor can pick individual Chinese companies trading as ADRs or choose Chinese stock funds that offer diversification.
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posted by Bob Moser at
6:45 PM
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