The HSI continues to plunge. The index fell more than 1000 pts today and is trading below the 24000 level. Chinese brokers have been one of the worst performers and news of State-backed Haixia Capital selling its entire stake of $880m in Haitong Securities has certainly weighed down the sector. The News Component under the OTAS Launcher bar provides access to full details on this deal. Chinese brokers’ H shares have been as much as -30% this morning, although most regained some ground to be -10% as of midday.
Citic Securities ‘H’ (6030 HK) has underperformed the industry by 19% over the past week and is now trading at an exceptionally low valuation relative to peers. The 12 month forward P/E valuation of 11.1x is also very low when compared with the average valuation over the past two years.
Similarly, in the mood of panic in the market, there has been a large dumping of shares in both China Galaxy (6881 HK) and China Everbright (165 HK), each of which plunged by over 20% in the past week compared to their sector. Both now flag as relatively very inexpensive and have rising EPS momentum, while short interest is down over the past month.
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