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China shares meltdown

Posted by Adrian on March 1, 2007

As I’ve highlighted in the earlier post about the valuation of the China stocks which is at an expensive valuation.  The market decided to make a sharp correction to managed the ‘irrational exuberance’ factor in the market.

 The meltdown was caused by big institutional investors selldown to readjust the expectation of the market valuation.  Most who suffered were short term trader and those who borrowed money to purchase shares.

 What’s next ?

The market jittery has caused a weak sentiment right now as HSI and China shares continued their downward trend.  Confidence has been hurt and it will tk a while to recover.

Let the dust to settle before you make your commitment again. 

The China market has become a force to reckon with from now on, no more we just rely on US and Japan market. 

The China market is still growing healthly on a pa basis but when people start to pawn their house or car to buy shares then that’s a bubble in the making.

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