ADR vs 国内A股

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If the market in China topped out nearly two weeks ago, the American depositary shares of Chinese companies that trade in the U.S. should have rolled over with them.

Right?

It would certainly make sense. But as Bespoke Investment Group pointed out in a posting on its website Monday, though both the ADRs and the broad measure of the Chinese market topped out - at least for the time being - in early August, the subsequent decline on the part of the index has proven far sharper than has been the case for the ADRs trading in New York.

The Chinese market has fallen 17% from the early-August highs; by contrast, the basket of ADRs has fallen just under 9%.

According to Bespoke, a basket of the 58 largest Chinese ADRs - those with market capitalizations of $300 million or higher - has remained 80% on a year-to-date basis, while the Shanghai Composite has held up, just not nearly as well, higher by 58% for 2009.

Bespoke’s conclusion: either the selloff in the Shanghai composite has been overdone to the downside, or there’s more risk to the valuations of the ADRs.

Meanwhile, shares of China Telecom (CHA) declined 5%, LDK Solar (LDK) dropped 3%  and China Southern Airlines (ZNH) fell 6% in Monday’s trading.