In the last week the foreign investment market is on the rise, with contributing factors such as:
- Forecasts stimulus from the European Central Bank and Bank of Japan during meetings in March
- Increased oil prices create a positive impact on energy-related stocks
- Enhanced reliability due to the increase of US GDP from 0.7% to 1%
- China's forecast stimulus that involved reducing the reserve requirement ratio (RRR)
The ECB meeting was held on March 10 where cutting interest rates was discussed. There was an announcement of a monthly budget increase from 60,000 million Euros to 100,000 million Euro to purchase bonds.
Apart from the fact that the upward trend of the market has been carrying on for three consecutive weeks, manufacturers expected the meeting to bring some resolution to the decrease in oil prices between OPEC and non-OPEC members. Saudi Arabia, Russia, Qatar and Venezuela has made a pact to maintain manufacturing levels if a third party steps in to assist in any way.
As for the United States of America, the Ministry of Commerce revised the country's GDP in the 4th quarter from 0.7% to 1% which helps establish reliability for cautious investors during the world's declining and volatile economy. Many expect the FED meeting in March to bring about no increase in interest rates, the latest reports and figures from the Institute for Supply Management (ISM) boasted better results than expected.
Recently the People's Bank of China (PBOC) went through with reducing the reserve requirement ratio to 0.5%, in order to facilitate continual economic stimulation. This leaves the bank with an extra 70,0000 million yuan for loans. China had also revised its projected GDP growth in 2016 from 7% to 6.5-7%.
