Chinese Bubble

The article on Chinese stock market which made $6 trillion in just 12 months reminds me of 1993 and 1997 in Malaysia. KLCI back then peaked at around 1300 points and of course Second Board stocks in 1996 and 1997 was at prices that were ridiculous. If one were to put their money in some of the stocks, they will not have gotten their principal money back.

Malaysian market between end of 1993 until today

Of course, for the Malaysian stocks (Bursa CI) to manage to get back to 1300 points, it took another 10 years and I can imagine that financial performance of the Top 30 stocks today are much better than those days.

There is no doubt that we will see a crash in Chinese stocks - by how much only and when. Will it impact Malaysian market - I think it may cause a ripple. Economically, will China face a downfall - that is hard to say, but things certainly do not seem good.

Shanghai Stock Exchange for last 5 years

http://www.intellecpoint.com/