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Pimco Buys ‘Cheap’ Cyclical Stocks as China Moves on Growth

Pacific Investment Management Co. has been buying raw-materials producers and Chinese industrial companies, some of the world’s worst-performing stocks this year, as policy makers in the fastest-expanding major economy move to bolster growth.

China, which reduced the amount banks must keep in reserve by half a percentage point to 21 percent on Nov. 30, may cut the ratio by as much as three percentage points in the next 12 months, Masha Gordon, the head of emerging markets equity portfolio management at Pimco, which oversees about $1.35 trillion worldwide, said in an interview. Inflation in the nation may slow to between 3 percent and 4 percent from 5.5 percent in October, she said.