Tokyo, Japan (PRWEB) May 31, 2017
Pacific Chiba Trust reported that Chinese stocks have been on the rise dismissing any potential cause of concern from private investors on the recent Moody’s downgrade.
This is the first time China have experienced its credit rating drop since 1989, with equities only falling shy of one percent that quickly changed pace trading at normal levels shortly after.
“The downgrade did not come up as a surprise to many traders nor investors alike, this was purely due to an increase of debt,” said Louis Hunter who is the head of Mergers and Acquisitions, Pacific Chiba Trust.
With a decision to come from the MSCI to announce if they intend to add Chinese listed equities into its global indexes; record highs are just one reason to why the recent downgrade has not given a negative sentiment in the market.
Both the Shenzhen Composite Index and the Shanghai Composite finishing up on a positive high.
Adam Walsh, Director of Corporate Derivatives at Pacific Chiba Trust commented: “The growth potential in China is huge, we have seen an influx of European clients wanting to gain access to investment opportunities regardless of the recent downgrade.”
China’s Finance Ministry rejected Moody’s decision, saying it “underestimates the government’s capability to deepen reform and expand overall demand.”
The Finance Minister of China stated he rejected the decision on behalf of Moody’s, commenting it “underestimates the government’s capability to deepen reform and expand overall demand.”
The cut has caused some concern in regards to companies facing higher borrowing costs overseas; however, rates remain volatile for the foreseeable future.