Chinese government may engineer a correction in stocks if valuations rise further

Bloomberg reports that “It’s no longer a question of whether China’s stock-market rally is a bubble, but when the bubble will burst.” Even if the bubble doesn’t burst by itself, Analysts at CLSA believe that the Chinese Government could step in and engineer a correction if stock valuations rise much further from here. There’s now some evidence that the big end of town is starting to depart with Macquarie Investment Management recently eliminating exposure to Chinese mainland shares “after turning bearish for the first time in seven years.” (VIEW LINK)