Monetary Easing Fails To Provide Succour To Stocks

September 2008 | Market Strategy

Yesterday's policy adjustments by the People's Bank of China (PBoC) have resolutely failed to arrest the decline in Chinese equities, with the benchmark Shanghai Composite Index (SCI) plunging through 2,000 today to bring its year-to-date losses to 62.3%. The short-term bounce we were anticipating failed to materialise as investors saw the reduction in lending rates and reserve requirement ratios for smaller banks as an indication of desperation on the part of the authorities, rather than a reassurance over slowing economic growth, and we are now expecting the SCI to continue its descent towards 1,800

If you would like to subscribe to Emerging Markets Monitor and gain instant access to this article, please click here to subscribe.

If you would like to take a trial to Emerging Markets Monitor please click on the trial link below.