China is perhaps the talk of the town everywhere around the world, but as a country adjacent to China, Korea seems to have some serious love affair with China. And it's not only the case with Korean businessmen or economists - many of Korea's Joes and Janes buy China funds, tens of them offered in the market, and brag about their nice returns.
But these days, if I ask ten people whether China is in bubble or not, about eight out of ten say China is indeed in bubble. Is it so? Here's some seemingly mutually contradictory stats.
- Bubble: Alibaba is trading at 300 times its earnings; Google at 33 times
- Not bubble: The total market cap of BRICs stock market (incl China) is $1.7 trillion, while the total market cap of all listed US companies is $13.9 trillion. Stats like this make BRICs including Chinese stocks look like a bargain.
From a web/technology point of view, an interesting point is that the biggest winner in the Alibaba IPO seems to be Japan's Softbank, which owns 40% of Alibaba stocks. Softbank already is one of the biggest technology companies in Asia, with Yahoo Japan (which has top market cap among all Asian software companies), Softbank mobile, Yahoo BB, etc. The fresh infusion of the 40% of Alibaba market cap is a nice addition and wouldn't hurt at all.
