Monday, June 22, 2015

Chinese Bubble

The article on Chinese stock market which made $6 trillion in just 12 months reminds me of 1993 and 1997 in Malaysia. KLCI back then peaked at around 1300 points and of course Second Board stocks in 1996 and 1997 was at prices that were ridiculous. If one were to put their money in some of the stocks, they will not have gotten their principal money back.

Malaysian market between end of 1993 until today
Of course, for the Malaysian stocks (Bursa CI) to manage to get back to 1300 points, it took another 10 years and I can imagine that financial performance of the Top 30 stocks today are much better than those days.

There is no doubt that we will see a crash in Chinese stocks - by how much only and when. Will it impact Malaysian market - I think it may cause a ripple. Economically, will China face a downfall - that is hard to say, but things certainly do not seem good.

Shanghai Stock Exchange for last 5 years


GL said...

Hi Felicity... Given the risk with regard to potential Chinese bubble and significant government debts all over the world. ... do you plan to liquidate some position to keep more cash to prepare for next opportunity?

felicity said...

No, I do not think I am selling at the moment.

谭振聪 said...

agree, resources hv been wasted on non-contructive activities like building ghost city another after another.

now the central keep slashing IR in order to maintain prop price.

Once burst, it will collapse like 911 towers crashed by planes.

Malaysia oso more or less the same