Breakingviews

Chinese shares still look overvalued

July 6, 2015

Mainland authorities are taking ever-bolder steps to prop up stocks which have dropped almost 30 pct in three weeks. Yet earnings growth is slowing and valuations are still high when compared with other markets. If fundamentals matter, Chinese equities have further to fall.

IPO madness in China stock markets is relative

June 26, 2015

Guotai Junan shares popped 44 pct after its IPO, valuing China’s third-largest broker at $35 billion. Rivals make that look pedestrian. Such excesses are possible because China remains mostly sealed. Foreign markets courting China’s capital should hope its exuberance stays home.

Delhaize pays for sway in 25 bln euro Ahold combo

June 24, 2015

Top brass at the Belgian supermarket operator have secured strong board representation in the agreed tie-up with its larger Dutch rival. The 5 pct fall in Delhaize stock suggests they may have surrendered shareholder value in the hope of retaining management influence.

Weaker shareholder rights a bad omen for Hong Kong

June 22, 2015

Ditching its “one share, one vote” rule may help the stock exchange lure listings from New York – or Shanghai. But Hong Kong’s standards are already under pressure as China’s capital markets opens up. The willingness to sacrifice long-held principles bodes ill for future reform.

China’s stock boom is not so different this time

June 17, 2015

Soaring share prices evoke memories of the market’s rapid rise and even swifter collapse between 2006 and 2008. Corporate reform hopes, hyperactive retail investors and faith in state support are recurring themes. The differences aren’t big enough to suggest a happier ending.

Return to China tough for American orphan stocks

June 12, 2015

Soaring home markets are prompting Chinese companies to delist from U.S. exchanges. The likes of social network Renren and data centre group 21Vianet may hope for higher valuations in China. But rigid rules make mainland listings harder. Only the unloved will attempt the journey.

MSCI lets fund managers ignore China a bit longer

June 10, 2015

The index compiler says China’s $10 trln stock markets aren’t quite ready for global benchmarks. That’s a relief for investors worried about inflated mainland valuations. But inclusion is only a matter of time. Being underweight will soon be a matter of choice, not inertia.

Focus Media sets tone for China’s shifting market

June 3, 2015

The Chinese advertising firm’s reverse listing in Shenzhen values it at $7.4 bln, twice what it was delisted for in New York two years ago. Dizzying valuations have reduced the appeal of foreign markets. For those with a taste for financial engineering, the door is now ajar.

China’s margin trading boom nears its limits

May 27, 2015

Investors have pumped up mainland stock markets with more than $300 bln of borrowed money, prompting brokers to scramble for extra capital. But leverage is already high, while the number of eligible new customers is finite. Securities firms need more durable sources of income.

Shake Shack unveils a cluckin’ $250 mln sandwich

May 22, 2015

The value of Danny Meyer’s upscale burger chain shot up 8.5 pct, seemingly on news that it may start outlets serving up chicken-based fare. Investors seeking signs of exuberance in wearables might do better looking at edibles. Shake Shack is now worth 550 times earnings.