Business
Continued Pain for China Stocks Predicted Amid Absence of Stimulus, Warns Cambridge Associates
Without incentives, Chinese shares will keep suffering, says Cambridge Associates
The hardship for those investing in Chinese shares is expected to persist throughout the year, states investment firm Cambridge Associates.
"Without significant economic and financial incentives, it will be challenging for Chinese stocks to excel for the remainder of the year," stated Costello. "For a lasting surge in Chinese stocks, China's economy must pick up speed, and deflationary pressures need to lessen to enable corporate profits to bounce back. Currently, there's little indication of such a trend."
Currently, the CSI 300 is priced at 11.5 times its anticipated profits for the year, a decrease from its five-year average of 13.8 times, based on Bloomberg's data. In contrast, the S&P 500 Index has a trading multiple of 23.2 times, while the Nikkei 225's multiple stands at 20.4 times, as indicated by the same data set.
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