China’s Momentum-Obsessed Traders Push Stocks Near 2007 High
- CSI 300 Index is about 6% away from topping its bubble peak
- Valuations in liquor stocks, battery makers are at extremes
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As China’s stock benchmark trades near the highest level in 13 years and commands the loftiest valuations in five, the country’s investors keep throwing money at the same expensive stocks.
Take Ganfeng Lithium Co., which trades at a staggering 125 times projected earnings. Or the recent rally in distillers like Kweichow Moutai Co., which has pushed an index of consumer staples to near its highest multiple since 2008. Shares of Shanghai Yuyuan Tourist Mart Group Co. -- whose main business is jewelry -- have rallied 52% in January after the firm bought a stake in a spirit maker.