Stocks are in dire shape, but this could be a time to buy


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Second, Chinese domestic investors must regain trust in the market. Foreign buyers might ride a recovery. They cannot drive it. On valuation alone, there can be little doubt: Chinese stocks are some of the most attractive assets available in global markets. According to Deutsche Bank, the Hang Seng Index trades at a forward price-to-earnings multiple of about eight, ie you pay $US8 ($12) for about $US1 of annual earnings, which compares with global equity valuations of more than double that. Its price-to-book value is less than one. Nor are these failing companies. The largest, such as Tencent and Alibaba, are...