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Aberdeen Sees Bubble Valuation in China Stock-Market Leaders

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Aberdeen Asset Management says there’s a bubble in the best-performing part of China’s equity market.

The nation’s small-cap stocks, which are trading at record highs after climbing more than four times faster than the broader market this year, have become too expensive, said Nicholas Yeo, the Hong Kong-based head of Chinese equities at Aberdeen. The small-cap ChiNext Index is valued at 81 times reported profit, versus multiples of about 17 for both the Shanghai Composite Index and the CSI 300 Index of the largest companies.