Should Investors Be Concerned About China?

Economic growth is slowing faster than Chinese officials want and there is increasing anticipation for further rate cuts from the Peoples Bank of China 

J.P. Morgan Asset Management 22 April, 2015 | 3:58PM
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Morningstar's "Perspectives" series features investment insights from selected third-party contributors. Here, Kerry Craig, Global Market Strategist, J.P. Morgan Asset Management, asks if there is a bubble in China equities.

This year the year of the sheep according to the Chinese zodiac calendar and is associated with the characteristics of calmness and prosperity. Only one of those applies to Chinese equity markets at present and it’s not calmness.

The domestic stock market in China has gained nearly 100% in the last 12 months and valuations in the market are starting to look very lofty prompting calls of a market bubble. The demand for equities is so great from Chinese investors that enthusiasm is pouring over into the Hong Kong market. So can the momentum in Chinese equities be sustained or is this really a bubble on the brink?

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About Author

J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.

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