China’s stocks are soaring, thanks to interest rate cuts by the government, but one market pro warned Tuesday that the fundamentals do not support the market right now.
“The fundamentals always win out at the end. What you have in China at the moment are very deep, structural problems that cannot be solved simply by reducing interest rates by 25 basis points,” said Simon Male, head of Asian equities at Auerbach Grayson.
China has recently introduced a series of measures, including rate cuts and reduction in the amount of reserves commercial banks are required to hold, in an attempt to ease monetary conditions.
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