How China’s stock market today compares with 2014 melt-up

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SHANGHAI: Similarities between a speculative frenzy that this month added more than $1 trillion in value to China’s stock market and 2014’s debt-fueled binge left investors wondering if a new bubble was in the making.

Familiar signs of euphoria emerged before Beijing moved to cool the rally on Friday. Turnover soared, margin debt grew at the fastest pace since 2015 and a bullish state media helped spur sentiment.

"There are many similarities between now and 2014, including ample liquidity conditions and a weak economy, ” said Ming."But Beijing needs a bull market to help support corporate funding needs at a time when the economy is struggling.”The 2014 rally began to accelerate that October, with China’s market value increasing 32% by the end of the year. The pace is even faster this time around with a increase of 41% since a March trough.

Daily turnover exceeded 1.5 trillion yuan on July 6, the first such reading since 2015, and stayed around that level the rest of the week. A similar spike in turnover was also seen in late 2014.

 

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