Market prices for some top Chinese companies have achieved the status of Gucci or Louis Vuitton in relation to their global counterparts; in many cases, they are the most expensive items on the shelf for equity investors.

Garry Evans, an Asia-Pacific equity strategist at HSBC, detailed this sudden change of pricing power commanded by Chinese stocks, as ‘China Rules the World’.

Going a bit far but in financial circles let there is a lot of truth in the title.

Chinese companies can now claim the world’s largest market capitalizations in banking, insurance, telecoms and airlines. In many other industries — securities brokerages, real estate, oil, and steel — the top Chinese companies lead in global rankings.

China’s largest bank, the Industrial and Commercial Bank of China, has swiped from Citigroup the title of the world’s largest bank measured by market capitalization. ICBC, at $333 billion, is 42% larger than than Citigroup’s $235 billion, and at 29.6 times estimated price-to-earnings ratio it is more than twice as expensive than Citigroup.
At a market capitalization of $246 billion China Life, the world’s largest life insurer by market value, is worth more than any of the largest North American insurers.
In the telecoms industry, China Mobile leads the world with a $346 billion market capitalization. AT&T is 36% smaller.
In aviation, Air China, is worth more than the combined value of two far more respected Asian rivals, Singapore Airlines and Cathay Pacific.

Evans attributed these astronomical valuations to a recent rapid run-up in Chinese stocks. The Hang Seng index — the benchmark for the Hong Kong market, where all the biggest Chinese companies are available to foreign investors — is up by 42% since August’s bottoming out in the midst of the global liquidity rout.
Source: Forbes