China reserve ratio cut sends investors mixed messages

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Suddenly signals are mixed for lenders and investors in China. On Sunday (April 19), the People’s Bank of China lowered banks’ reserve requirement ratios by 100 basis points to help stoke more

China reserve ratio cut sends investors mixed messages

Suddenly signals are mixed for lenders and investors in China.

On Sunday (April 19), the People’s Bank of China lowered banks’ reserve requirement ratios by 100 basis points to help stoke more activity in the economy.

Two rate cuts in two months should be music to the ears of already bullish investors in the country’s stock market.

In the past month alone, over six million new A-share accounts have been opened in China.

And the Shanghai Composite Index is up over 30 percent this year, sitting at seven-year highs.

China’s regulators, however, have recently warned investors to be cautious.

New rules introduced on Friday (April 17) that clamp down on financing for margin trading are sending worrying signals to investors.

But as one Chinese security house said: “regulators gave the market both sticks and carrots,” and investors will need to prepare for more uncertainty.

ENDS

Tags : Messages, mixed, investors, Sends, Ratio, reserve, china

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