Xu Gao, chief economist at Everbright Securities Co., comments on China’s decision to cut interest rates for the first time since 2008.
“The abrupt rate cut, out of most people’s expectations, should be good news to the market and should give a boost to stocks in all sectors, particularly the cyclical ones and also including property stocks, though the narrower interest margin won’t be a good thing to banks.”
“It’s a strong signal on easing, which is far more significant than cutting reserve ratios.”
“The move indicates data in May may have remained weak, even though it may not necessarily have deteriorated from April.”
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