TOKYO: A slump in risk assets caused by the decline in China’s yuan could soon turn to boom should the People’s Bank of China (PBoC) shift toward stimulus mode in the world’s No. 2 economy, according to Nomura Holdings Inc.
“As Chinese financial conditions further deteriorate and market stress worsens, we actually perversely push closer to the risk-asset positive outcome of escalated PBoC stimulus and easing measures,” said Charlie McElligott, a strategist with Nomura’s equities group, in a note to clients Thursday.