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Don't overlook cheaper H-shares: Credit Suisse

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EVEN as China's red-hot A-share market soars to new heights on the Shanghai Stock Exchange, analysts are reminding investors not to ignore the relatively cheaper Chinese companies listed in Hong Kong, known as H-shares.

EVEN as China's red-hot A-share market soars to new heights on the Shanghai Stock Exchange, analysts are reminding investors not to ignore the relatively cheaper Chinese companies listed in Hong Kong, known as H-shares.

Credit Suisse head of China research Vincent Chan told clients in a Wednesday conference in Singapore that he sees downsides to A-shares but upsides to H-shares.

Opportunities are in H-share banks and consumer discretionary companies like department stores, household appliances, footwear and auto firms, he said.

His 12-month target for the Shanghai Composite Index was 2,800 points. The index is now at around 3,300 points, up some 65 per cent from 2,000 points a year ago.

Volumes and values traded are enormous. What is "horrible" is that the entire stock market, when one considers free float, is turning over every three weeks, he said.

"Will it go to 5,000 points before dropping back? I don't know ... It is a pure momentum market. You buy stocks. You don't buy companies," he said.