Related News
Rate rise set to put pressure on stocks
By Pan Xiaoyi |
December 27, 2010, Monday
|
Print Edition
Print Edition
SHANGHAI stocks are expected to extend losses this week because the latest hike in interest rates will weigh on market liquidity, analysts said.
The Shanghai Composite Index lost 2 percent last week - its sixth decline in seven weeks - as the central government has been beefing up efforts to contain inflation.
To battle inflationary pressure and possible asset bubble, the People's Bank of China announced an interest rate increase on Saturday, a Christmas gift investors could do without.
The one-year benchmark lending rate will increase by 25 basis to 5.81 percent while the one-year benchmark deposit rate will rise to 2.75 percent from 2.5 percent effective from yesterday.
The move is the latest after the central bank raised interest rate on October 19, the first time in nearly three years.
But Li Xunlei, chief economist at Guotai Jun'an Securities Co, believed that the 25 basis-point increase ''is not enough and more hikes are needed.''
Kou Jianxun, an analyst with Soochow Securities Co, said that the interest rate hike "is sure to hit the market, which is already struggling with a tighter supply of capital. Shares of capital-intensive industries such as property developers will take a blow."
Since mid-October, China has raised banks' reserve requirement ratio three times to 18.5 percent for the country's biggest lenders and 15 percent for smaller banks.
The consumer price index surged to a 28-month high of 5.1 percent in November.
The Shanghai Composite Index lost 2 percent last week - its sixth decline in seven weeks - as the central government has been beefing up efforts to contain inflation.
To battle inflationary pressure and possible asset bubble, the People's Bank of China announced an interest rate increase on Saturday, a Christmas gift investors could do without.
The one-year benchmark lending rate will increase by 25 basis to 5.81 percent while the one-year benchmark deposit rate will rise to 2.75 percent from 2.5 percent effective from yesterday.
The move is the latest after the central bank raised interest rate on October 19, the first time in nearly three years.
But Li Xunlei, chief economist at Guotai Jun'an Securities Co, believed that the 25 basis-point increase ''is not enough and more hikes are needed.''
Kou Jianxun, an analyst with Soochow Securities Co, said that the interest rate hike "is sure to hit the market, which is already struggling with a tighter supply of capital. Shares of capital-intensive industries such as property developers will take a blow."
Since mid-October, China has raised banks' reserve requirement ratio three times to 18.5 percent for the country's biggest lenders and 15 percent for smaller banks.
The consumer price index surged to a 28-month high of 5.1 percent in November.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔＄粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
