China Rate Cut Confirms `Problematic’ Growth Outlook: Platypus

Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which manages about $1 billion, comments on Asian equities. The MSCI Asia Pacific Index fell 1.4 percent to 111.57 as of 11:01 a.m. in Tokyo.

On China’s interest cut and Europe:

“It’s obviously very volatile, and the key issue really is around European sovereign debt and having some permanent resolution. Even though China’s rate cut was unexpected, people are selling because it confirms in their minds that the growth outlook is problematic. That’s the interpretation that the market seems to have taken over the last 24 hours or so.

“People are fearful that data coming out tomorrow will be bad.”

On catalysts for a turnaround in the market:

“To have a rally that actually holds its gains, we need euro bonds. Europeans have to come up with a structure that’s going to underwrite the balance sheets of countries that are in a trouble.

“It’s a combination of that and having some pro-growth policies in Europe. Until we see those two things, the market is going to continue to trade pretty coolly.”

On Federal Reserve Chairman Ben S. Bernanke:

“They are never going to tell you when they are going to do something, and he basically just read from the same table that he had the last 18 months or so.

“I wasn’t surprised there was nothing concrete in what he said. That’s just the way central bankers communicate with politicians and the market.”

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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