Salient to Investors:

Zhao Danyang at Pureheart Capital Asia has more than 80 percent in Chinese stocks traded in Hong Kong, Singapore, the US and at home from 50 percent at the start of 2013. Pureheart has sold almost all of its Indian stock holdings and plans to further cut its Vietnam investments.

Pureheart said Chinese stock valuations are close to historical lows and the bear market is an opportunity to buy, and is most bullish on Chinese consumer goods and pharmaceutical stocks, because of rapid income growth of low-income households in the last 5 years and an aging population.

Jim Chanos at Kynikos Associates has warned since at least February 2010 of a pending property market slump putting China on a treadmill to hell and is short bank shares.

The Shanghai Composite Index hit a 10-yr low of 11 times earnings on June 28 versus at 48 times on Oct. 31, 2007. The Hang Seng China Enterprises Index reached a 10-yr low of 7.6 times earnings on June 30 versus 31 times on 10//31/07. The price-to-book and earnings multiples of both the Shanghai and Hong Kong indexes declined to half of their 10-year averages in 2013.

EPFR Global said China equity funds saw investor redemptions in 20 of the last 22 weeks.

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