To be sure, we’ve had our share of laughs at the expense of China’s margin-fueled equity mania. First there was the realization that more than 4 million new stock trading accounts were created in China last month alone – the country is now adding nearly that many each week. Then we discovered that if statistics are to be trusted, around one in three of those millions of new accounts likely belongs to someone with an elementary school education or less. Finally, we learned that the rally has minted an army of day trading housewives, security guards, and most recently, banana salesmen who last Monday traded so much that they literally overwhelmed the Shanghai Exchange’s volume-tracking software.
But not everyone thinks it’s a veritable tulip mania, just ask HSBC’s head of China equity strategy Steven Sun who ‘wouldn’t say it’s a bubble,’ or Citi who figures turnover in Hong Kong could double from here boosting exchange operator HKEx’s bottom line by 40% in the process. So against this backdrop we wondered: are foreign investors as enthusiastic about the prospects for a continuation of the rally in Asia?
This post was published at Zero Hedge on 04/25/2015.