Historical p/e
Average price/earnings ratio of Standard & Poors composite index (red line is historical average).
Read full article at: econbrowser.com > lost_decade_for stocks
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p/e
Read full article at: econbrowser.com > lost_decade_for stocks
Private equity i Kina blir mer kinesiskt
"What’s changed? PE firms grew large and successful raising and investing US dollars, and then taking Chinese companies public in Hong Kong or New York. This worked beautifully for a long time, in large part because China’s own capital markets were relatively underdeveloped. Now, the best profit opportunities are for PE investors using renminbi and exiting on China’s domestic stock markets. Many of the first generation PE firms are stuck holding an inferior currency, and an inferior path to IPO. "
[...]
In the end, success in PE investing comes down to one thing: maximizing the difference between your entry and exit price. This differential will often be twice as large for investors with renminbi as those with dollars. The basic reason is that stock market valuations in China, on a current p/e basis, are over twice as high as in Hong Kong and New York – or an average of about 30 times earnings in China, compared to fifteen times earnings in Hong Kong and US.
[...]
For PE firms, the stark reality is: if you can’t enter with renminbi and exit in China, you cut your profit potential in half."
[...]
In the end, success in PE investing comes down to one thing: maximizing the difference between your entry and exit price. This differential will often be twice as large for investors with renminbi as those with dollars. The basic reason is that stock market valuations in China, on a current p/e basis, are over twice as high as in Hong Kong and New York – or an average of about 30 times earnings in China, compared to fifteen times earnings in Hong Kong and US.
[...]
For PE firms, the stark reality is: if you can’t enter with renminbi and exit in China, you cut your profit potential in half."
"If given the freedom, of course, any PE investor would choose to exit in China. The problem is, they don’t have that freedom. Only fully-Chinese companies can IPO in China. It’s not possible for Chinese companies with what’s called an 'offshore structure'"
Läs hela artikeln på chinafirstcapital.com
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