China, China, burning bright

THE accelerating rally in China's A-Share market, which has been a sleepy cowboy town for many years, is raising a few eyebrows.

The Shanghai Stock Exchange Composite Index is up some 43 per cent year-to-date and is set to become the world's best-performing market this year.

Observers attributed the run-up to the return of retail investors wielding leveraged money. China's central bank also boosted confidence with an interest rate cut.

Given the valuations that some of the biggest stocks there have…