ratio is 5 times, Datastream shows. Down 34% year-to-date, the Hang Seng is the second-worst performing major global index after Russia. Shares in dual-listed firms are selling in Hong Kong for half their onshore price, but this discount is a chimera as the shares are not mutually fungible, making arbitrage impossible. Even so, it highlights how skeptical foreign capital is of the China story these days. Returns are demonstrably higher elsewhere, and outflows are.
One issue is that investors are terrified of President Xi Jinping. Because the population of Chinese companies that listed in offshore markets is overweight on internet companies, fintech and, in Hong Kong, property, they have suffered more under Xi’s various policy crackdowns than the staid state enterprises trading in Shanghai. However, it does seem like the pressure is easing.
An unverified note trending on social media, and tweeted by influential economist Hao Hong, said a "Reopening Committee" has been formed by Politburo Standing Member Wang Huning. A Chinese foreign ministry spokesman later said he was unaware of the situation.
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