By Darren Boey
on Feb 08 2011 07:56 AM
  • PIT

General disclaimer

For Professional Investors Only – Parry Global Group (including Parry International Trading Limited or Parry Capital Management Limited) does not offer investment services to firms or investors who are not regarded as Professional Investors in Hong Kong or its equivalence elsewhere.

Parry Global Group includes Parry International Trading Limited which is licenced to provide trading services to professional investor in Hong Kong. Parry Capital Management Limited is licensed to provide asset management services. While licences have been obtained from the Securities and Futures Commission, Hong Kong (“SFC”) none of the information contained in this website is reviewed and approved for distribution by the SFC.

Professional Investors are expected to have appropriate trading experience and understanding of professional investments as defined under the applicable codes/guidelines/rules and regulations in Hong Kong or other jurisdictions, and a suitable risk profile to bear the risk of partial or total investment loss therefrom.

Gavin Parry, managing director of Hong Kong-based Parry International Trading Ltd., comments on China’s third interest-rate increase since October. China’s benchmark one-year lending rate will increase to 6.06 percent from 5.81 percent, effective tomorrow, the People’s Bank of China said on its website today. Parry made the comments in a telephone interview. “A rate rise was expected, but given they delayed to the end of Chinese New Year, it created anxiety over the potential severity. Now that uncertainty is removed, the markets can focus on the January trade, and the producer prices and consumer-price data next week. “At least there’s a bit more stability on a sentiment basis. I think it’s going to wash through and we can carry on. “Markets will knee-jerk on this, particularly the Western markets. Sitting out here on the ground, we knew this was coming. Look at the growth in money supply. “We all knew they had to tighten monetary policy, which increases the cost of capital. They’re going to increase the reserve ratio further given the liquidity lag of Chinese New Year. If you increase the reserve ratio requirement, you lock up liquidity, decreasing access to capital. “You can probably expect to see more micro management on the cost of capital. I don’t think you’ll see another rate increase this quarter. They will employ specific sector-cooling measures.”

  Link :
  Original Link :