Chinese Equity Market Bubble Builds

posted in: Charts, China | 0

Here are some stats on the Shanghai Composite:

  • +49% year-to-date
  • +143% in the last year
  • Up 5 consecutive trading sessions
  • Investor margin debt has more than doubled in the last year


Shanghai Composite (Daily)



Shanghai Composite (Weekly)



Shanghai Composite margin debt is at nearly 9% of total capitalization of shares trading:

China_marginMy intuition tells me that Shanghai shares have launched into the final inning of a parabolic blow-off. However, it is well known that the final stage of a parabolic market advance is the most volatile and least predictable. In my estimation we could see anywhere between a further 10% to 30% appreciation: