Projected Annual Return (%) | |
Singapore | ![]() |
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Spain | ![]() |
Belgium | ![]() |
Australia | ![]() |
UK | ![]() |
Italy | ![]() |
Hong Kong | ![]() |
Sweden | ![]() |
Germany | ![]() |
Korea | ![]() |
France | ![]() |
Switzerland | ![]() |
Canada | ![]() |
Netherlands | ![]() |
USA | ![]() |
Japan | ![]() |
Emerging Market: | |
Russia | ![]() |
Egypt | ![]() |
Pakistan | ![]() |
Brazil | ![]() |
Turkey | ![]() |
Mexico | ![]() |
China | ![]() |
South Africa | ![]() |
Indonesia | ![]() |
India | ![]() |
Stock | Price | Price Change |
---|---|---|
SZSE:300881 | ¥ 29.40 | ¥4.90 (20.00%) |
SZSE:300402 | ¥ 25.86 | ¥2.92 (12.73%) |
SZSE:000922 | ¥ 11.61 | ¥1.06 (10.05%) |
SHSE:600021 | ¥ 12.39 | ¥1.13 (10.04%) |
SHSE:603239 | ¥ 17.33 | ¥1.58 (10.03%) |
SZSE:002543 | ¥ 12.50 | ¥-1.39 (-10.01%) |
SHSE:605090 | ¥ 27.05 | ¥-3.00 (-9.98%) |
SHSE:603721 | ¥ 16.43 | ¥-1.82 (-9.97%) |
SHSE:603283 | ¥ 23.50 | ¥-2.30 (-8.91%) |
SHSE:688278 | ¥ 32.76 | ¥-3.14 (-8.75%) |
Based on these historical valuations, we have divided market valuation into five zones:
Ratio = Total Market Cap / GDP | Valuation |
---|---|
Ratio ≤ 42% | Significantly Undervalued |
42% < Ratio ≤ 54% | Modestly Undervalued |
54% < Ratio ≤ 66% | Fair Valued |
66% < Ratio ≤ 78% | Modestly Overvalued |
Ratio > 78% | Significantly Overvalued |
Where are we today (2022-09-08)? | Ratio = 56.46%, Fair valued |
Based on these modified historical valuations, we have divided market valuation into five zones:
Ratio = Total Market Cap / (GDP + Total Assets of Central Bank) | Valuation |
---|---|
Ratio ≤ 29% | Significantly Undervalued |
29% < Ratio ≤ 37% | Modestly Undervalued |
37% < Ratio ≤ 46% | Fair Valued |
46% < Ratio ≤ 54% | Modestly Overvalued |
Ratio > 54% | Significantly Overvalued |
Where are we today (2022-09-08)? | Ratio = 41.49%, Fair valued |
From the equation presented on the U.S. market valuation page,
Investment Return (%) = Dividend Yield (%) + Business Growth (%) + (Re/Rb)(1/T)-1
We can compute the predicted and actual returns of the China stock market over a given time period, T. In the calculation, we set T to equal eight years, the approximate length of a full economic cycle. The calculated results are presented in the chart below.
The Predicted Return line indicates the expected, or predicted annualized return for the next eight years if the current TMC / GDP ratio reverts to its recent 10 years mean of 60.06%.
The Modified Predicted Return line indicates the expected, or predicted annualized return for the next eight years if the current TMC / (GDP + Total Assets of Central Bank) ratio reverts to its recent 10 years mean of 41.42%.
The Actual Return line indicates the actual, annualized return of the China stock market over eight years. We use “Shanghai Composite Index” to do the actual return calculation. We can see the calculations largely predicted the trend in the stock market as the actual return line is closely parallel to the two predicted return lines.
Under the original buffett indicator, the stock market of China is expected to return 7.8% a year for the coming years. This is from the contribution of economic growth in local current prices: 5.79%, Dividend Yield: 1.27% and valuation reverse to the mean 0.77%.
Under the modified model, the contribution of economic growth and dividend yield stays the same while the valuation reverse to mean changes to -0.02%. Consequently, the stock market of China is expected to return 7.0% a year.
This is the projected return and the modified projected return of the stock market in China relative to other countries. Click on the country on the left sidebar to check out the details for each country.