STOCK market value is a measure that brokers, analysts, fund managers and economists the world over have been trying to quantify ever since share trading was invented.
For the Hongkong investor the sporadic rises being seen in local stocks can be a little disconcerting as valuation models need to be adjusted and re-assessed for every major swing in the Hang Seng Index.
There are quite a number of valuation systems available to investors to use in determining market value in Hongkong. These include various forms of sophisticated computer-driven analysis, technical analysis or chartism, systems using market momentum theory and, of course, there are plain old personal hunches.
From time to time Business Post will take a look at these methods. Today a number of ratio evaluations used by analysts will be studied.
These tend to be heavily used by brokers analysing Western equity markets like London and New York which tend to be more efficient, and valuations tend to be greatly affected by the existence of mature bond markets.
The table shows a number of ratios used by Goldman Sachs in the valuation of markets, which has been made applicable to Hongkong by SG Warburg Securities.