Stocks up as reserve ratio hike eases fears
By Feng Jianmin |
May 14, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday rose by the most in a month as fears of tightening measures in the short term eased following Thursday's central bank's announcement of a rise in the reserve requirements - the fifth time this year.
The benchmark Shanghai Composite Index went up 1 percent, or 26.95 points, to close at 2,871.03, its biggest gain since April 13.
The gauge rose 0.2 percent this week, its first advance in four weeks.
"The reserve ratio requirement increase isn't necessarily bad news for the market," said Hao Kang, a portfolio manager at ICBC Credit Suisse Asset Management Co. "It will ease speculation there will be further tightening measures like interest-rate increases in the near term. Some investors may see this as a buying opportunity amid weak market sentiment."
Banks were told to make less money available for lending on Thursday. The reserve requirements will rise by 0.5 percentage point from next Wednesday, the People's Bank of China said.
"The timing was a surprise but the measure is in line with market expectations," Nanjing Securities said in a note. "It is aimed at offsetting large inflow of hot money in April."
Banks rose. The Industrial and Commercial Bank of China, the country's biggest lender, rose 2 percent to 4.58 yuan. China Merchants Bank, the sixth-largest, gained 1.1 percent to 14.08 yuan.
The benchmark Shanghai Composite Index went up 1 percent, or 26.95 points, to close at 2,871.03, its biggest gain since April 13.
The gauge rose 0.2 percent this week, its first advance in four weeks.
"The reserve ratio requirement increase isn't necessarily bad news for the market," said Hao Kang, a portfolio manager at ICBC Credit Suisse Asset Management Co. "It will ease speculation there will be further tightening measures like interest-rate increases in the near term. Some investors may see this as a buying opportunity amid weak market sentiment."
Banks were told to make less money available for lending on Thursday. The reserve requirements will rise by 0.5 percentage point from next Wednesday, the People's Bank of China said.
"The timing was a surprise but the measure is in line with market expectations," Nanjing Securities said in a note. "It is aimed at offsetting large inflow of hot money in April."
Banks rose. The Industrial and Commercial Bank of China, the country's biggest lender, rose 2 percent to 4.58 yuan. China Merchants Bank, the sixth-largest, gained 1.1 percent to 14.08 yuan.
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