Chinese fund managers said they would raise the proportion of their portfolios invested in stocks over the next three months, marking a bounce from a 21-month low in May as sentiment rose on an expected loosening of liquidity, according to a Reuters poll.
Fund managers said China's central bank's reduction of reserve requirement ratios (RRR) for some lenders and the slowing pace of drainage in the money markets were the key factors which would help keep liquidity conditions loose.
"More intensive stimulus policies are expected in the second half of this year. Together with the reduction of reserve requirement ratios, this has improved investor sentiment and made the probability of a market crash less likely," said a Shanghai-based fund manager, who declined to be identified because he was not authorised to speak to the media.
Average recommended stock weightings in June rose to 79.4 percent from 76.3 percent a month earlier, according to a poll of nine China-based fund managers conducted this week. At the end of May, China cut RRR for some banks by up to 50 basis points if they agreed to lend substantially to small firms and the farm sector. Qualifying banks include China Merchants Bank, China Minsheng Banking Corp and Bank of Ningbo.
Comments
Comments are closed.