Vol. 1, Issue 10, Part M (2015)

Abstract
Rational speculative bubble can be explained as upward movements of prices above fundamental value. This study focused on rational speculative bubble period of Hong Kong stock market during year 2008. The intrinsic value predicted by using the selected time interval is 20997.03 which shows that the market value is deviated about 33.63% from its fundamental value. This deviation is called as size of the speculative rational bubble that formed during global economic crisis 2008. By using the predicted intrinsic value, we found that the rational speculative bubble start to form and grow in Hong Kong stock market from 15/06/2006 to 10/12/2007. There are two bubble phases found in the period of selected time interval. It is essential needs for researcher to study on financial bubbles. It is because the economic bubbles are one of the serious issue that give negative implications to the development of economy which is the factor leads to an economy crisis.