A good, amusing chart from Paul Kedrosky shows the P/E ratios on various markets, most notably China’s new “Chi-Next” exchange, where the average P/E is 100. The exchange is being touted as China’s NASDAQ, a market for emerging companies. And like the NASDAQ of yore, the first day of trading created 18 paper billionaires.
Kedrosky makes a good observation though:
While some are pointing to the new ChiNext listings as an example of China celebrating growth entrepreneurs, I’m not convinced. The early listed companies are a grab bag of utilities, movie companies, pulp & paper, and machinery makers. And don’t even get me started about the low listing hurdle. As Andy Xie has said, “This is a V.I.P. table built on top of a casino”.