The Asian markets closed mostly in green on Monday, with shares in Hong Kong and mainland China rallied after Beijing announced another interest rate cut. The People’s Bank of China cut benchmark interest rates for a third time since November and held open the door to more cuts, as the monetary authority steps up policy easing in the face a deepening slowdown. The 25 basis point cuts bring the one-year lending rate down to 5.1% and the equivalent deposit rate to 2.25%. The central bank stated that it will continue to promote real interest rates back towards reasonable levels. The tone of the bank’s comments is more aggressive than those of previous policy moves and suggests that the government’s appetite for these kinds of adjustments will grow so long as China’s low inflation/deflationary environment persists. Chinese Producer Price Inflation (PPI) remained unchanged at an annual rate of -4.6%, compared to the preceding month. Chinese Consumer Price Inflation (CPI) rose to an annual rate of 1.5%, from 1.4% in the preceding month.
South Korea Finance Minister Choi Kyung-hwan stated that the country is planning to announce new measures in June to help boost exports. South Korean exports in April posted their worst fall in two years. Indonesia will gradually cut its corporate tax rate to discourage companies from booking profits in lower- tax countries such as Singapore. The government will cut the rate from 25 percent currently to maybe 17.8 or 17.5 percent. The move adds to plans for a tax amnesty for citizens as the government tries to lift revenue collection.
Asian Indices Last Trade Change in Points Change in % Shanghai Composite 4,333.58 127.67 3.04 Hang Seng 27,718.20 140.86 0.51 Jakarta Composite 5,172.48 -9.73 -0.19 KLSE Composite 1,805.49 -2.16 -0.12 Nikkei 225 19,620.91 241.72 1.25 Straits Times 3,470.80 18.79 0.54 KOSPI Composite 2,097.38 11.86 0.57 Taiwan Weighted 9,663.72 -28.28 -0.29
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