Other observers, like Franklin Templeton’s Mark Mobius, also extol technology stocks as the sector could produce more sustainable expansion in China. However, Mobius warned that stock valuations are already reflecting a successful transition, with valuations on the ChiNext, a proxy for new economy companies, trading three times above the Shanghai Composite.
For example, PGJ has a price-to-earnings ratio of 30.96 and a price-to-book of 2.47. Meanwhile, FXI is trading at a 9.59 P/E and 1.31 P/B; ASHR shows a 12.05 P/E and a 1.71 P/B; and the S&P 500 Index has a 17.01 P/E and a 2.31 P/B.
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