In light of indications of the decline in the economy ... Is there a bubble in the shares of China?

The Chinese economy is under the weight of customs duties and a rooted real estate crisis, but the stocks are still rising in a separation that raises doubts about the ability of the high wave to resist. Only last month, local shares added almost a trillion dollars to its market value, and the Shanghai composite index reached its highest level in a decade of time, and the CSI 300 (CSI 300) index increased to more than 20%this year. Meanwhile, almost all modern economic indicators – from consumption trends and house prices, have launched inflation – warning signals for investors. The Chinese rich have turned into shares, the height of the shares is driven by the transformation of wealthy investors into shares in light of the lack of alternatives. Although marketing progress may indicate a decrease in the risk of a sudden correction, some analysts warn that a bubble is forming. Numura Holdings warns against “excessive optimism”, while TS Lombard describes this contrast as a state of confrontation between “optimists in the market and pessimists about the macro economic.” “The markets can expect, whether correct or wrong, improve the basics of the macro economic economy. But a emerging market will not be sustainable if inflation remains close to scratching, and the ability of companies to prosecute serious factors due to poor local demand,” says Humin Lee, the most important macroeconomic strategy at Lombard Odier in Singapore. One of the main reasons for the doubt of the sustainability of the current increase is. Shying indicators at the level of the macro economic economy in China settled the consumer prices in July, producers’ prices dropped for the fifth month, and GDP -Nader factories continued to determine its declines. While Beijing started with a campaign to reduce the surplus production capacity and the price wars, its impact has been limited to now. Future profits have dropped over 12 months for companies listed in the CSI 300 (CSI 300) with 2.5% of its highest level this year. The intense price competition has the profits of companies such as JD.com Inc. and “Geely Automobile Holdings Ltd” negatively affected. Also read: “JP Morgan”: China Curbed Surplus Production Capacity can support stock markets. This disturbing image was fueled by the expectations that Beijing will improve its support. But the policy that applies so far indicates that officials avoid a widespread strategy and prefer a deliberate approach. The stock profit also complicates the policy response to the slowdown in the economy, according to “Nomura”, where measures supporting growth risk support the strengthening of the stock market bubble. The 2015 boost and corruption course compared the market observers to the situation at the start of the 2015 boom and corruption course in 2015. At the time, a sharp increase in margin disserted a strong increase in shares before a strict campaign caused these massive debt activities. Although current profits are much more moderate than the rocket height we saw a decade ago, the weak economy and the low prices of factories increase uncomfortable comparisons. As with the mutation of artificial intelligence today, the new technologies, from the “Internet Plus” initiative to big data, fed the then market centiasm. The size of the margin owed is 2.1 trillion yuan ($ 292 billion), compared to 2.3 trillion yuan at the peak of 2015. Chinese equity gain tends to have a strong correlation with liquidity and margin balances. “The abundance of liquidity in the market and the gradual waking up to the vulnerable instincts reminds us of the difficult times we saw a decade ago,” says Hao Hong, the investment officer of Lotus Asset Management. “Of course we are still in the early stages,” he added. The inertia in the rising there, of course, reasons for the belief that the current profits can be sustained. The pace of raising the positions in shares was more balanced compared to some previous sessions. Over the past few days, the rise has expanded to include a broader part of the market, indicating a more permanent momentum. “There are larger deposits, stronger technology companies and direct market rescue policies, all of which are much stronger than they were a decade ago,” said Chu Chen Shen, president of “Asymptote Investment Research” in Beijing. Despite these supporting factors, the faded scene of the overall economy in China makes some analysts more selective. RBC Wealth Manegement Asia said she avoids the sectors where profits are influenced by a deflationary environment, or many competitive sectors that penetrate the profit margin. “The upcoming China market is closer to a puzzle box than to a traditional growth story,” says Hebei Chen, an analyst at Vantage Markets in Melbourne. She added that “the danger is that once morale (positive) is faded, investors will come out immediately.”