Valuation is a legitimate concern for A-shares. Anecdotes regarding that situation include Shanghai/Hong Kong premium trading at its highest levels in six years and triple-digit P/E ratios in Shanghai and Shenzhen, the other A-shares market, as far as the eye can see. Those are catalysts that bode well for CHAD.
“China A-shares may not be bubble territory just yet, but it takes little creative thinking to imagine it getting there if the rally goes on much longer,” notes Direxion.
Chart Courtesy: Direxion