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Here's a piece in Bloomberg on China stockmarkets, and it isn't cheery:
- Shanghai Composite Index firms reported earnings per share for the past year that were 33% below what analysts had predicted 12 months ago
- The gap widened to the most since 2009
- The gap , far outstrips the difference between projections and actual earnings in the U.S., and is more than double that of Chinese companies in Hong Kong
The piece cites influences along familiar lines:
- Squeeze on industry as the government reorients the economy around services
- Excess industrial capacity
- Volatile earnings
But also, and disturbing (and not surprising):
- As to why analysts didn't anticipate the scale of the shift: Foundation Asset Management (HK) Ltd. says in a market where short-selling is almost impossible, there's little demand for negative research and strategists face more pressure to present an optimistic outlook.
