Chinese stocks hit a decade-low P/E ratio at 8, revealing a concerning trend in valuation practices. In a seismic development, a Hong Kong court orders Evergrande’s liquidation, plunging its stock further, while China’s real estate index remains in an 85% free fall. In response to the crisis, China deploys economic stimuli, contemplating a short selling ban. The recent reduction of reserve requirements reflects the deepening economic woes, compounded by 19 consecutive months of falling home prices. China’s financial landscape is in tumult, demanding scrutiny and caution.
Chinese Stocks have fallen to a P/E Ratio of 8
Lowest valuation in a decade pic.twitter.com/o4va69XTFv
— Win Smart, CFA (@WinfieldSmart) January 29, 2024
BREAKING: A Hong Kong court has ruled that Evergrande, China's largest real estate developer, must be liquidated.
The stock is now down another 20% today on the news and trading has been halted.
Evergrande is now considered the most indebted property developer in the world.… pic.twitter.com/2ixwMwgB2o
— The Kobeissi Letter (@KobeissiLetter) January 29, 2024