The Shanghai Composite falls almost 20% from its recent peak.
“This is probably not a dip to buy,” wrote analysts at Morgan Stanley. The bank lowered its price target for the Shanghai benchmark in a report Thursday, citing concerns like lofty valuations and high margin debt relative to China’s free float market capitalization. Margin debt, or the use of borrowed cash from brokerages, has reached 8.5% of the value of China’s tradable shares. That’s well above the 4.6% level Taiwan reached at the height of its market bubble.
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