Amid a historic margin-fueled equity frenzy [4] in mainland China that has tech stocks trading at 200X and has driven a wave of new, possibly [5] literate “investors” to open [6] 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 [7] 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 [8].
