A: I do not think the market has reached a level where you need to be very cautious. They have just moved from beaten down valuations to a slightly higher level in terms of valuations. Before the rally, market was trading below long term averages in terms of valuations.
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Many must have high exposure to such foreign borrowing, but the true extent is unknown and, for now at least, unknowable. China’s new currency policy may be the least bad option available to them, but it is a symptom of the extent of the fundamental disequilibriums within the Chinese economy that must eventually be resolved. We are far from the end of this tale..
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