Valuation Gap Between Chinese A And H Shares To Narrow

The valuation gap between A shares and H shares is expected to dwindle, though the two share classes still won’t be fungible, notes a Credit Suisse analyst.

Victor Lin of Credit Suisse in a trading strategy report dated April 11, 2014 notes investors anticipating narrowing spread between A and H shares could profit by getting long exposure to A shares and shorting H shares.

Rough trading in Chinese A shares

Recently, Chinese shares crumbled after the government announced harsher-than-expected measures to curb the surge in property prices. Consequently, Chinese A shares, which track stocks listed on the Shanghai or Shenzhen exchanges, saw some rough trading last month. Though only...