The China Bubble is Going to Burst

[marmar]

(Bloomberg) It’s no longer a question of whether China’s stock-market rally is a bubble, but when the bubble will burst.

That’s the refrain from a growing number of analysts as valuations climb to levels that by some measures already exceed the peak of China’s last equity mania in 2007.

A market crash may come within six months, Bocom International Holdings Co. said Tuesday, citing an analysis of global bubbles over 800 years that shows the speed of gains in China mirroring past market peaks. Macquarie Investment Management, whose Asian stock fund is outperforming 97 percent of peers in 2015, has already eliminated exposure to mainland shares after turning bearish for the first time in seven years. The government may engineer a correction if valuations rise much further, according to CLSA Ltd.

“We are probably going to be in a very volatile trading period before a crash eventually happens,” Hao Hong, the chief China strategist at Bocom International in Hong Kong, said in an interview with Bloomberg Television. “It is plain that China is in a bubble.”

Fueled by record margin debt and unprecedented numbers of novice investors, China’s market capitalization has tripled in the past year to $9.8 trillion. At 84 times projected earnings, the average stock on mainland exchanges is now almost twice as expensive as it was when the benchmark Shanghai Composite Index peaked in October 2007. ................(more)

http://www.bloomberg.com/news/articles/2015-06-16/china-bubble-debate-turns-to-when-not-if-stocks-will-tumble

[dixiegrrrrl]

1. which means not as many Chinese millionaires buying up properties here.

Also has been reported that financial fortunes are falling for the Russian millionaires, who are slowing their USA housing purchases.