gold investing

China changes rules on market bubble fears

Fears of a bubble in its booming domestic stock market has forced the Chinese government to relax investing rules.

The China Banking Regulatory Commission (CBRC) announced late on Friday that it would let Chinese financial institutions invest in overseas equities for the first time.

The news sent Asian stocks listed in Hong Kong, or "H-shares", soaring to record highs today, with analysts predicting further gains to come.

The Hang Seng China Enterprises Index, which tracks the performance of all the Hong Kong listed H-shares of China enterprises, closed at 10,948.72, up 5.36pc.

Meanwhile, the main Hang Seng Index closed at 20,979.24, a rise of 2.5pc.

Dr Frank Gong, head of China research and strategy, and chief economist at JPMorgan, said: "With excess liquidity on such a massive scale, there is the risk of an asset bubble in China arising eventually, if not now.