FT – Naspers/Prosus alert: Are Chinese stocks a value trade or a value trap?

Amidst a backdrop of skepticism and market turmoil, Chinese stocks teeter on the edge of opportunity or peril. Brimming with untapped value, these equities present a tantalising prospect for astute investors, offering compelling valuations and potential growth. Yet, lingering doubts over corporate governance and geopolitical tensions cast a shadow over the market's revival. The key lies in a dual transformation: companies must shift focus from lofty promises to tangible returns for shareholders, while domestic investors must rediscover faith in a market marred by past disappointments. As Beijing hints at policy shifts and regulatory reforms, the stage is set for a potential resurgence, where returning cash to investors could prove to be the much-needed remedy. It's a pivotal moment, where discerning investors may find the chance to seize the elusive value hidden within the depths of China's stock market.

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By Robin Harding

When an asset is declared 'uninvestable' it is often time to buy

It was a dire January for Chinese stocks. After falling almost 10 per cent, Hong Kong's Hang Seng stock index now trades around the same levels it did in 1997, when Tencent and Alibaba, two of its largest constituents, had not yet been founded and the territory had just returned to Chinese sovereignty.

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