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"I Wouldn't Say It's A Bubble," HSBC China Strategy Chief Says Of The Country's Leverage-Driven, Equity Frenzy

Tyler Durden's picture




 

Amid a historic margin-fueled equity frenzy in mainland China that has tech stocks trading at 200X and has driven a wave of new, possibly literate “investors” to open more than 4 million stock trading accounts in the past 30 days alone, and with money now pouring into “undervalued” (and that’s now a very relative term) Hong Kong shares sending the Hang Seng up 10% in just one week, some might suggest that there’s a (super) bubble forming in Asia and that would be bad for all of the housewives who have recently taken up day trading as their favorite hobby. Here to explain why there’s no bubble and why investors should "enjoy the ride", are FT and HSBC.

FT: “With valuations so high inside China, what do you make of suggestions that China has a new equity bubble?”

 

HSBC’s Head Of China Equity Strategy Steven Sun: “I wouldn’t say it’s a new equity bubble in the Asia market… it’s not like 2007 [and while] certain sectors may look bubbly... for now, I would suggest continue to enjoy the ride.”

 

 

 

And besides, even if it were a bubble, we found out today that bubbles are good.

 

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Fri, 04/10/2015 - 18:10 | 5980588 dimwitted economist
dimwitted economist's picture

Seriously.... WTF?  CRAZY PILLS! OMFG!!!!

Fri, 04/10/2015 - 18:41 | 5980673 Gambit
Gambit's picture

Time to short the Markets, crazies are coming out of the woodworls.  When this happens it is time.  Wooo FAZ FAZ FAZ!

Sat, 04/11/2015 - 02:09 | 5981460 Laowei Gweilo
Laowei Gweilo's picture

you'd be insane to heavily short this market yet.... you have any idea how much insane liquidity and leverage is still on the sidelines

 

that said, IF (big if) Politburo acts fast to curb it, then it's a go.... Politburo doesn't want too much money storming into stocks because they want that money shoring up housing

 

but if they don't act fast and the bubble gets too big, they won't be able to 'act and contain' the market for the same reason they can't with housing -- which is why it's either now or never

 

 

of course it should crash based on valuations which are crazy by even SP500 standards.... BUT... relative to the SP500's gains since 2009, SSE is still relatively low in terms of gains.. lower than NIK.... way effing lower than SP500 or NASDAQ.

Fri, 04/10/2015 - 18:47 | 5980691 HedgeAccordingly
HedgeAccordingly's picture

Battle of the iBanks..

"Credit Suisse Calling For Continued Rally In Hong Kong Market, Similar to 2007 Valuation"
http://hedgeaccordingly.com/2015/04/credit-suisse-calling-for-continued-...

Fri, 04/10/2015 - 22:47 | 5981220 chilli sauce
chilli sauce's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com

Sat, 04/11/2015 - 02:18 | 5981470 saveandsound
saveandsound's picture

Stop it!

Fri, 04/10/2015 - 18:12 | 5980593 czarangelus
czarangelus's picture

Well, it's been officially denied.

Fri, 04/10/2015 - 18:12 | 5980594 Thirst Mutilator
Thirst Mutilator's picture

Chinese joobux await bitchez!

Fri, 04/10/2015 - 18:14 | 5980595 davidalan1
davidalan1's picture

"Tiny bubbles" Don Ho

 

In the wine (in the wine)
Make me happy (make me happy)
Make me feel fine (make me feel fine)

Tiny bubbles (tiny bubbles)
Make me warm all over
With a feeling that I'm gonna
Love you till the end of time

So here's to the golden moon
And here's to the silver sea
And mostly here's a toast
To you and me

So here's to the ginger lei
I give to you today
And here's a kiss
That will not fade away

Sat, 04/11/2015 - 08:17 | 5981651 old naughty
old naughty's picture

Hey, I miss Don Ho, the self-proclaimed "I hate that song" (Tiny Bubbles) singer.

Guess HSBC don't like them bubbles.

Fri, 04/10/2015 - 18:51 | 5980706 The Ingenious G...
The Ingenious Gentleman's picture

"No, no, of course it's not a bubble. That's ridiculous. A bubble is when it goes up, say, 10% a day.... Wait a minute."

Fri, 04/10/2015 - 18:57 | 5980728 Joebloinvestor
Joebloinvestor's picture

HSBC the biggest fucking criminal enterprise behind or in front of GS.

Yeah, trust what they say.

Fri, 04/10/2015 - 19:25 | 5980787 Bunga Bunga
Bunga Bunga's picture

Bernanke said 2005 the same. So don't worry, it's all fine.

Fri, 04/10/2015 - 19:50 | 5980843 ebworthen
ebworthen's picture

Just ask Bob Pisani and Jim Cramer, it's all based on great fundamentals.  BTFATH!

Fri, 04/10/2015 - 20:21 | 5980914 Al Tinfoil
Al Tinfoil's picture

Not bubble.  Is froth.

Fri, 04/10/2015 - 21:16 | 5981034 Aussiekiwi
Aussiekiwi's picture

Its all Awwwwsum!.......until its not.

Fri, 04/10/2015 - 21:50 | 5981114 Lmo Mutton
Lmo Mutton's picture

Does that mean its not a bubble till it is?

Fri, 04/10/2015 - 23:17 | 5981290 Spungo
Spungo's picture

This is China's 1929. A growing middle class is now interested in the stock market and investing. 

Sat, 04/11/2015 - 02:18 | 5981471 Element
Element's picture

Shoe shine boy gives investment advice.

Sat, 04/11/2015 - 04:37 | 5981537 katchum
katchum's picture

Don't fight the housewives.

Sat, 04/11/2015 - 06:28 | 5981571 strangewalk
strangewalk's picture

In Hong Kong the few women who don't work and actually stay home instead of having Filipina houseslaves raise the kids spend all day glued to the stock market ticker, while working moms connect through mobile devices and do their jobs with half a brain, day trade with the other. In the evening couples spend 15 minutes of quality time together online to check the daily appreciation of their flat, and on Sunday wife is off to Macao or the horsetracks, hubby spends weekend in Shenzhen romping with his mainland mistress.

(By the way if you like Chinese girls, Hong Kong is in fact, absolutely the best place since all the guys go to the mainland chasing their romantic aspirations--just make sure to bring your wallet--the only bulge in your pants she'll be interested in is the one in your back pocket)   

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