Schroders: Correction in Chinese shares highlights irrational exuberance

We also expressed our concerns that A-shares were already at vulnerable levels in light of their frothy valuations, increasing issuance of initial public offerings (IPOs), rising margin financing and deteriorating corporate fundamentals. 

Furthermore, we shared our view that a change in the stance of regulators, such as the tightening of leverage trading, could be one of the potential triggers to cause a major correction in the market.