Where would you list?
Paul Kedrosky’s chart shows the average P/E multiples of various exchanges around the world. He points out that for the price of one Chi-Next, you could buy seven Canadas (or by that logic even more Brazils).
Other observations:
* It makes me wonder if I were a CEO or a CFO pondering a public offering, that could list anywhere, where would I want to list? On the Chinese exchanges where I might get a higher valuation? Or would I prefer a lower valuation on the NYSE or Nasdaq, and the related SOX and reporting obligations? Makes me think twice.
* Both China and Brazil are growing mightily. Why then the massive difference in valuations? Short China/Long Brazil?
* Are the Chinese multiples the logical result of capital controls on the Yuan. Chinese savers buy Chinese stocks, because capital controls prevent them from buying in any other markets. This is the reason for the disconnect in valuations for companies listed in China and Hong Kong.