P/E Ratios: Nasdaq vs China
In the past we have made comparisons between the p/e ratios of the Nasdaq Composite and China's Shanghai Composite. Up until mid-July when US equity markets peaked, the price to earnings ratios on the two indices were very similar, and the argument could be made that even though China's stock market was rapidly increasing, its valuation - while high - was still inline the Nasdaq's. Since mid-July, however, the two p/e ratios have diverged dramatically as the prices on the two indices have moved in opposite directions. The trailing 12-month p/e ratio on the Nasdaq is now 35.88 while the p/e on the Shanghai Composite is now 49.57.
i habe noticed that quarterly spike that the NAADAQ has (Quarterly earnings growth?).
What about the Shanghai index? (i would thnink that the earnings growth have been HUGE over the last couple of years but the quarterly "spiking down" of the Shanghai PER is almost invisible. Has it earnings growth been taken into account?
Posted by: SeeLai | August 22, 2007 at 07:51 PM
SeeLai,
While China has seen nice earnings growth over the last couple of years, the Shanghai Composite's price has risen faster than earnings.
Posted by: Justin | August 23, 2007 at 05:40 PM
The long term trend here is quite clear.
Posted by: Stock Market Investor | May 06, 2009 at 01:31 AM