China’s stock markets have surged to their highest levels in a decade, but the rally risks creating a bubble while offering little support to the slowing economy, according to historical lessons, Nomura has warned.
The Japanese investment bank cautioned that the rally may have even less impact on growth than the 2014-15 boom, which ended in a painful crash and did little to lift consumption or investment.
“The stock boom has the potential to lead to irrational exuberance, an increase in leverage…China’s stock markets have surged to their highest levels in a decade, but the rally risks creating a bubble while offering little support to the slowing economy, according to historical lessons, Nomura has warned.
The Japanese investment bank cautioned that the rally may have even less impact on growth than the 2014-15 boom, which ended in a painful crash and did little to lift consumption or investment.
“The stock boom has the potential to lead to irrational exuberance, an increase in leverage…  Read More ​Business – South China Morning Post