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Cut in interest rate will boost China stocks
21 Dec 2021 (260 views)  

China cut its benchmark interest rate for the first time since April 2020. It did not help the stock market. The cut was expected and rather small.  Article  

I believe that the sentiment towards China stock will change in the days ahead and China stocks will be stronger. 

Here are my reasons:

a) It will take a few days for the additional funds produced by the cut in interest rate to flow into the stock market. The traders may not act now, but they will act soon.

b) The central bank will make additional cut in the interest rate, if they deem it necessary. Although the current cut is small, more cuts may follow.

c) The cut in interest rate signals the intention of the authority in China to strengthen the economy and the financial system, and to prevent a collapse caused by the weak property market. 

I have a large investment in China stocks, so I look forward to higher stock prices. Most of my invested stocks have low price earning ratio and high dividend yield anyway.

Note - this is my speculation. I am not giving investment advice.

Tan Kin Lian
 


Cut in interest rate will boost China stocks
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China cut its benchmark interest rate for the first time since April 2020. It did not help the stock market. The cut was expected and rather small.  Article  

I believe that the sentiment towards China stock will change in the days ahead and China stocks will be stronger. 

Here are my reasons:

a) It will take a few days for the additional funds produced by the cut in interest rate to flow into the stock market. The traders may not act now, but they will act soon.

b) The central bank will make additional cut in the interest rate, if they deem it necessary. Although the current cut is small, more cuts may follow.

c) The cut in interest rate signals the intention of the authority in China to strengthen the economy and the financial system, and to prevent a collapse caused by the weak property market. 

I have a large investment in China stocks, so I look forward to higher stock prices. Most of my invested stocks have low price earning ratio and high dividend yield anyway.

Note - this is my speculation. I am not giving investment advice.

Tan Kin Lian