CHINA UNLEASHED THE BIGGEST STIMULUS PACKAGE YET TO BOOST THE CRATERING PROPERTY MARKET AND THE ECONOMY
1) The People’s Bank of China cut mortgage rates for individual borrowers as well as its Reserve Requirement Ratio (RRR) by 0.50 percentage point.
2) The minimum down-payment ratio on second home purchases will go down to 15% from 25%
3) China may also cut the Reserve Requirement Ratio (RRR) further this year by another 0.25 to 0.5 percentage points, RRR cut won’t apply to small banks.
4) China is also weighing plans for a market stabilization fund unlocking $113 BILLION from the central bank - less than 1% of the total stock market size.
5) The CSI 300 index spiked by 4.3%, recording the best day in 4 years.
Short-term it will improve sentiment. However, it may not be enough in the face of one of the largest real estate bubble bursts.
The pace at which people are losing jobs and companies' earnings are falling will not magically make them spend and lift up the economy.
