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Yuan Devaluation Would Prove Just Speed Bump for China ADRs

  • ADRs came roaring back after 2015 depreciation of currency
  • Icon sees 14 percent gain over fair value for China stocks
Views Of Chinese Yuan As Yuan Crunch Spurs Banks to Hoard Abroad as China Curbs Outflows

Photographer: SeongJoon Cho/Bloomberg

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Chinese ADRs would take an immediate hit if the yuan were to depreciate, but the securities would quickly rebound, if history is any guide.

Back in August 2015, the securities sank on China’s surprise move to let its currency weaken by about 2 percent. A year later, with the yuan still weakening, the ADRs had stabilized, and then took off again as the currency strengthened.