China’s stock market has been on a roll — is it a boom or a bubble?
On February 3, 2017, investors are talking at a Stock Exchange Hall in Hangzhou, China, China, Hangzhou.
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China’s stock market is a sharp rally this year, artificial intelligence, steps aimed at gaining self -sufficiency and Beijing’s price wars as the steps seen as the frequency investor’s optimism campaign.
However, as retail investors pushed the market to higher and cheer up the Bulls liquidity support and policy tail winds, some experts ask questions if the market is entering the bubble area.
The main CSI 300 index has climbed about 16% since the beginning of the year and is approaching more than three years. The CSI 300 Information Technology Index, which measures the performance of technology companies within the CSI 300, has reached its highest level since 2015 last week.
In Standard Chartered, Raymond Cheng, North Asian Regional CIO of North Asian CIO, added that retail investors play a key role because they shift some of the bank deposits to the stock markets, and “China’s ongoing equity rally is intercribed with economic foundations.” He said.
According to HSBC data, retail investors dominate China’s land exchanges and make up about 90% of daily transactions. This is a sharp contrast with the large global exchanges led by institutions – for example, individual investors only individual investors 20-25% of the trade volume.
According to HSBC, a total of Chinese household savings are now more than 160 trillion Yuan ($ 22 trillion), which is currently recorded. But, Only 5% Analysts are allocated to CNBC, allocated to stocks, that is, as deposit rates have decreased to deepen retail participation and remain in favor of property.
Foundations and Momentum
“Foundations do not support the momentum well, but markets are always leading the foundations,” Lotus Asset Management said, “Foundations do not support the momentum.” He said. He continued: “There is a sign of overheating in the general market, but the pockets of the market are a bit too hot.”
“This is not a balloon yet, but that way, Hong said Hong. Contract Research Organizations – Pharmaceuticals, Biotechnology, Medical Device Companies to provide research and development services to companies and technology names as the most risky segments, but they stopped labeling them as bubbles.
According to Goldman Sachs, this year, China and Hong Kong stock value has been added more than $ 3 trillion. However, China’s economic data, a real and sustainable backfire continues to continue very little approval, he said.
Japanese financial Holdings Company Nomura last month, even if the China’s economy shows signs of spraying in the second half of the year, the stock market continues to increase excessive leverage and potential “bubbles” warned.
China’s economic slowdown worsened as a series in August The basic indicators remained below expectations. Permanent weak domestic demand and Beijing’s efforts to reduce industrial excessive capacity have focused on production.
Industrial production increased by 5.2% last month, by marking the weakest speed of July, 5.7% of July and since August 2024. Retail sales increased by 3.9% in a Reuters questionnaire and 3.4% of the slowdowns than 3.7% of the growth of July.
“So far, the current momentum has been supported by the expectations of structural improvements in the economy, but we have not seen a sign of return on the macro foundations,” JP Morgan Asset Management’s global market strategist Chaoping Zhu. He said.
Six-month reports show that some stabilization in sectors such as AI, semiconductors and renewable energy resources and “anti-development” in Beijing’s price battles can increase the capacity of institutional earnings.
For example, the Chinese chip manufacturer Cambricon reported a record profit in the first half of the year and jumped to more than 4,000% Yuan ($ 402.7 million) per year in the first six months and emphasized the increasing momentum of domestic chip companies.
Nevertheless, Zhu points out that technology values may be “priced in very optimistic expectations” and leave the market vulnerable to withdrawal before gaining earnings.
