A sharp decline in stock Why

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A sharp decline in stock Why?

The. We look at Japan over the past decade how low interest rates to know what I mean. Second, the United States and the general mortgage subprime crisis is caused by sweeping the world. Europe, Asia,[link widoczny dla zalogowanych], Australia,[link widoczny dla zalogowanych], each with or without a similar problem? Of course, it is very serious. Now nearly all industries, companies and families are being revalued its own debt levels and contraction. And this contraction may lead to global recession, the government and central banks are likely to face a rare new task: that is, to encourage banks to lend, businesses and households to encourage more investment, more to borrow money. The high cost of doing business and prospects is not busy inhibit business and home borrowers desire. For governments and central banks, which led to the river like the horse, but can not force the horse to drink water. The interest rate reduction cycle for the Chinese treasury bonds and corporate bond market will be a new stimulus; for roads, ports and other physical assets of a large number of companies, is also good news. But the stock market, the good will be limited. We will encounter most of the company's future earnings and cash flow pressures. Our property market because of interest rate cuts and relief, but there are too many supply issues - the question of capacity to pay ordinary people may take a little time to have significantly improved. The Chinese monetary policy on a large shift of the world's oil, minerals and other commodities markets, is still hard to tell, because all other variables are changing rapidly. , (Author: chief operating officer of Shenzhen Investment Limited, the former UBS head of China research Zhang Bridge) A sharp decline in stock Why? ��Financial Times At the close, the CSI 300 Index slid 3.7%, and Hong Kong H-shares fell up to 7.4%. The Shanghai Composite Index closed at 1,986.64 points - which is from November 2006 for the first time since the Shanghai Composite Index closed at 2000 points or less. Increased volatility in the global financial system against the backdrop of financial stocks leading the decline has become China's stock market sector. 16 policy of asymmetric interest rate cut (ie, one-year lending rate by 27 percentage points,[link widoczny dla zalogowanych], while deposit rates remain unchanged) f bow made by investors of the China Banking savings and loan spreads narrowed on worries about earnings prospects . Overseas Economic Review, Phase 20 than under the thematic focus, real estate stocks higher,[link widoczny dla zalogowanych], mortgage rates fell 9 percentage points in terms of near-term prospects for the industry is positive. A relaxation period to start? Is clearly out of the economic slowdown may be worse than previously anticipated concerns, in the Mid-Autumn Festival, the Chinese economic policy makers cut the first time in 6 years, interest rates, but also reduces the majority of bank deposit reserve ratio. China's economic growth during the first half led to a slight slowdown in corporate profits dropped sharply than proportionately, in addition, the company saddled with high debt, the face of price controls utmost fragile. The market's focus shifted from economic growth down along with earnings outlook for different sectors of concern. Carefully appraise the global climate after the stock market is expected to investors will remain cautious mood. . Of key central bank's move means the industry that it wishes to alleviate the problem of limited financing of important industries, but also that the Government intended to guarantee the release of stable economic growth signal. The near term,[link widoczny dla zalogowanych], interest rate cuts and increased spending on financial expectations for the major industry has a different meaning: Bank deposit rates remain unchanged in the context of interest rate cut benefits for the Chinese banking industry will cause little negative impact. However, the deposit reserve rate cut will improve the short-term liquidity of small and medium banks (not in China's five major banks cut deposit reserve ratio of the column), lower in the inter-bank market that net borrowing for the financing costs of those agencies. Monitor the real estate property will benefit from lower borrowing costs. Meanwhile, the 5-year mortgage rates down more than 9 percentage points (5-year mortgage rates less 18 percentage points lower) demand for the real estate market to provide appropriate support. In addition to the direct impact of lower interest rates, the further relaxation of monetary policy is expected to improve before the pervasive pessimism of the real estate industry. Infrastructure industry is relatively easy due to the infrastructure industry to obtain financing, construction and building materials companies will be able to benefit. To support the infrastructure projects associated with the reconstruction of the central bank announced in May by the earthquake affected areas of the financial institutions cut the deposit reserve ratio by 2 percentage points. This policy is in line with previously announced massive government investment in infrastructure projects. Fiscal policy is expected in the coming months will be more active, which indicates that the infrastructure industry in China good. (Author: JP Morgan Securities Jing Ulrich, Chairman of the Chinese market) Overseas Economic, flat on the 2l