China's central bank hikes interest rates

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#1
Business News

China's central bank hikes interest rates

BEIJING - China's central bank on Saturday raised interest rates by 25 basis points for the second time in three months as authorities ramp up efforts to curb borrowing and tame inflation.

The People's Bank of China said in a brief one-line statement that it will raise the one-year lending and deposit rates by 25 basis points each. The move takes the rates to 5.81 percent and 2.75 percent respectively.

In October, policymakers raised rates for the first time in nearly three years as they resort to stronger measures to try to slow a flood of liquidity which has been fanning inflation and driving up property prices.

Ever fearful of inflation's potential to spark unrest, authorities have been pulling on a number of policy levers to rein in consumer prices and cool the red-hot real estate market.

Earlier this month, the central bank ordered lenders for the sixth time this year to keep more money in reserve, effectively limiting the amount of money they can lend.

Despite these measures, bank lending has remained stubbornly high and property prices have continued to rise.

The consumer price index, a key measure of inflation, topped five percent in November for the first time in more than two years as food costs soared nearly 12 percent on year, official data shows.

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seems like they are fearful that the inflation may get out of control...12% yoy on food is quite scarely...i wonder how the ordinary chinese can survived there..given their measely pay on avg.

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#2
Been waiting for this news to release for 2 weeks. Damn.. and only to release on Christmas night.. Hopefully Monday would not have bloodbath or this hike is already priced in
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#3
u into S shares? or H shares?
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#4
(26-12-2010, 11:48 AM)floorfilla Wrote: u into S shares? or H shares?

I invest mainly in Singapore stocks. Although there are not direct correlation but I expect high selling pressures when Chinese hikes interest rates as Singapore markets follow HK movements.
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#5
errr...bro..typo...the chinese is hiking interest rate.

but that is also a short term knee jerk reaction...shouldnt be alarm...unless fundamentally some factors are unsound then investors should be worried...

but based on human phsycology...the mainstream will react even to the slightest news..lol
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#6
oops my mistake. amended accordingly.

I was planning to scoop up some after chinese announces the actual basis point hike but in the end got fed up in waiting and purchased them on christmas eve..
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#7
hehe...dun mention.

But not all sectors will react to the news negatively..bro...which sector of the companies u bought into?
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#8
I bought only Hiap Seng. The support level is 0.60. Have not seen it dropped below that level since. If tomorrow it drops further to 0.62, I may average down.
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#9
agreed with Engineer san,

maybe good time to bottom fish some good value stocks....

monday dunno market will knee jerk? i think will dip but dunno to wat level.

But, SG market sure pull back one, considering GE in June'11...my reliable source told me...let see
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#10
My source says May. Big Grin
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