China Battles to Shore Up World's Priciest Stock Market: ChartBy and
Chinese authorities are contending with sky-high valuations as they revive support for the nation’s tumbling equity market.
Government funds purchased local stocks on Tuesday after a plunge on Monday triggered a share halt, according to people familiar with the matter. Even after the drop, the median stock on mainland exchanges trades at about 65 times earnings -- more than three times higher than the U.S.’s multiple of 19. While the $5 trillion selloff in Chinese shares over the summer dominated global headlines, the Shanghai Composite Index ended the year almost 10 percent higher, following a 53 percent gain in 2014.
"Although they would want to support the stock market, they should have realized that it’s impossible," Stephen Ma, senior portfolio manager at LGM Investments Ltd., said in Hong Kong. "Chinese equities were among the world’s best performers last year and investors are probably just trying to bring the mainland market inline with the rest of the world, which was much weaker."
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