19 Jan 2015
More monetary easing measures expected in China – RBS
FXStreet (Barcelona) - Gao Qi of RBS expects the recent update in rules by CSRC and CBRC to pave way for PBoC to deliver more monetary easing measures in China with chances of a broad-based RRR cut.
Key Quotes
“Latest rules unveiled by the CSRC and CBRC could cool down the booming equity market to some extent through preventing funds released for the real economy from rushing into the stock market. It could pave the way for the PBoC to deliver more easing measures including a broad-based RRR cut in our view.”
“Last Friday, China’s securities regulator CSRC tightened rules on “securities margin trading” business that allows investors to borrow part of the money necessary to buy a security or borrow security to sell. Total 12 securities houses/brokerage firms are penalized for their wrongdoing with three of them are banned from opening new margin trading account for clients for three months.”
“Meantime, the nation’s banking regulator CBRC issued draft rules to regulate banks’ entrusted loans that will not be allowed to be invested in bonds, futures, financial derivatives and wealth management products. More importantly, the CBRC banned entrusted loans funded with bank loans.”
“We still look to receive the front-end CNY ND IRS on rallies with nimble target and stop-loss levels in the run-up to the Chinese New Year Holiday (18-24 February).”
Key Quotes
“Latest rules unveiled by the CSRC and CBRC could cool down the booming equity market to some extent through preventing funds released for the real economy from rushing into the stock market. It could pave the way for the PBoC to deliver more easing measures including a broad-based RRR cut in our view.”
“Last Friday, China’s securities regulator CSRC tightened rules on “securities margin trading” business that allows investors to borrow part of the money necessary to buy a security or borrow security to sell. Total 12 securities houses/brokerage firms are penalized for their wrongdoing with three of them are banned from opening new margin trading account for clients for three months.”
“Meantime, the nation’s banking regulator CBRC issued draft rules to regulate banks’ entrusted loans that will not be allowed to be invested in bonds, futures, financial derivatives and wealth management products. More importantly, the CBRC banned entrusted loans funded with bank loans.”
“We still look to receive the front-end CNY ND IRS on rallies with nimble target and stop-loss levels in the run-up to the Chinese New Year Holiday (18-24 February).”