SHANGHAI, Dec 11 (Reuters) – China’s central bank will risk
creating asset bubbles if it cuts reserve requirement ratios to
boost banks’ lending power, but analysts reckon it has little
choice with the economy growing at its slowest in decades.
Reductions to guidance lending rates, targeted short-term
liquidity injections, and most recently eased enforcement of
loan-to-deposit ratios and lending quotas have all failed to
deliver positive macroeconomic returns.
SHANGHAI, Dec 11 (Reuters) – China stocks fell on Thursday
on concerns over market liquidity after a slew of new listings
were approved, and trading volumes continued to plummet from an
all-time high on Dec 9.
China’s securities regulator approved ahead of schedule 12
IPOs late on Wednesday, a move which could cool a blistering
rally in the country’s stock markets which has seen the
benchmark CSI index surge over 30 percent in two weeks.
BEIJING, Dec 10 (Reuters) – China’s inflation hit a
five-year low in November, stoking expectations that Beijing
will move more aggressively to head off the risk of deflation in
a slowing economy, which put fresh life into soaring share
markets after a reversal on Tuesday.
Consumer price inflation grew at its slowest rate in five
years in November, while the producer pricing index (PPI) is
already reading negative after its 33rd straight monthly
decline, down 2.7 percent from a year earlier.
BEIJING (Reuters) – China’s annual consumer inflation eased to a five-year low of 1.4 percent in November, signaling persistent weakness in the world’s second-largest economy and giving policymakers more room to ease policy to support growth.
Beijing is increasingly concerned about the risk an onset of deflation would pose to an economic recovery that has failed to gain traction despite a swath of reform initiatives intended to restore investor confidence and respark productive business investment.
SHANGHAI, Dec 10 (Reuters) – “High leverage, low
thresholds!” the website says. “(China’s) A shares are heating
up; if you don’t allocate capital now, then when?” Many, it
appears, are choosing now, gorging on cheap credit to ride a
wild stock market rally.
The website, Jinfuzi.com, will let investors borrow up to 10
times their principal with only 2,000 yuan ($323) down in order
to buy stocks and futures.
SHANGHAI, Dec 9 (Reuters) – Chinese shares plunged on
Tuesday, sharply reversing course from a two-week rally fuelled
in part by speculation the central bank would further ease
policy, with a key stock index recording its biggest fall since
the depths of the global financial crisis.
Volatility also gripped the currency markets, where the yuan
posted its biggest one-day decline against the dollar since 2008
on talk of a possible cut in banks’ reserve requirements by the
central bank – which could flood the market with renminbi and so
dilute its value versus the dollar.
SHANGHAI/BEIJING, Dec 9 (Reuters) – China’s yuan slid
dramatically against the dollar on Tuesday, heading for the
largest single-day drop in its relative value since 2008, as
corporates bailed out of the currency on expectations of further
Spot yuan slid nearly half a percent to 6.2007
per dollar in morning trade, accelerating a decline that began
when China’s central bank surprised markets last month by
cutting interest rates, seen as bearish for the yuan.
SHANGHAI, Dec 9 (Reuters) – China Development Bank bond
yields rose nearly 30 basis points at market open on Tuesday,
traders said, as the market reacted to new corporate bond market
restrictions announced on Monday afternoon.
The benchmark government bond future contract also
reacted, sliding over 1 percent in morning trade.
SHANGHAI, Dec 4 (Reuters) – Chinese brokers have seen a
surge of new stock investors and a dramatic spike in turnover on
soaring local bourses, some risking borrowed money in response
to government policy measures aimed at supporting a faltering
The flood of small investors suggests Beijing is finally
persuading people to allocate capital more broadly to the
economy, instead of betting it all on property, though the last
policy-led stock rally ended in a brutal crash.
SHANGHAI, Dec 4 (Reuters) – China and Hong Kong shares rose
on Thursday led by financials, as the market’s bullish rally on
expectations of further economic stimulus measures showed no
signs of losing steam.
Most economists believe it is not a question of whether
Beijing will roll out more stimulus measures but when, with many
expecting both further interest rate cuts and reductions in
banks’ reserve requirement ratios (RRR).