Chinese equities have been a poor investment for most of the past two years. Just how poor becomes clear when investors compare China's stock market capitalisation as a proportion of gross domestic product with its BRICS market peers of Brazil, Russia, India and South Africa and the developed markets of Britain and the United States. China is firmly bottom of the pile. The upside, according to analysts at brokerage Jefferies, is that the valuation of China's stock market is now so low that any rebound is likely to be accompanied by improvements in economic and financial conditions as well as supportive measures of the capital markets. A potentially virtuous cycle.
