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[Tor]

Super Bubble Intact Interesting bit from a Credit Suisse note this morning: “… the top 100 stocks (based on market cap as at 4 June 2007) accounted for 66% of total market cap, 41% of free-float market cap and 82% of 2006 aggregate profits of all A shares. On a simple average basis, these 100 stocks dropped only 5.5% between 21 May 2007 to 4 June 2007, while the simple average of decline for all stocks during this 2-week period is 14.9%, i.e., the bigger and better companies are outperforming.” If you’re not familiar with Credit Suisse’s “super bubble” thesis, they believe that the A share market in China is repeating the super bubble seen in Taiwan and Japan in the 1980’s for four reasons: 1) excess liquidity; [demand] 2) free-float in the A-share market is too low; [supply] 3) RMB expected to appreciate; [demand] and 4) a prolonged period of high growth with low inflation [demand] The fifth reason they forget to mention is: 5) my manicurist can’t get enough of this market!