China Stocks Expected to Fall Considerably Further

A bubble in Chinese stocks is bursting and the market is likely to halve in value from current levels, one strategist told CNBC on Thursday. The benchmark Shanghai stock index slid more than 3 percent on Thursday to 4,528, highlighting the frail state of a stock market that plunged 13 percent last week.

But even after the correction, the Chinese stock market is up some 40 percent this year alone, boosted by heavy investment by retail investors and monetary easing from China’s central bank.

“We’re cautious on Chinese equities, which we think is a bubble which is bursting real-time here,” Stewart Richardson, chief investment officer at RMG Wealth Management, said on CNBC’s “Worldwide Exchange.”


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