Need more measures to curb liquidity flow in China: UOB AMC

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Mark Tan Keng Yew of UOB Asset Management says Chinese authorities are taking measures to cool off the speculation in the domestic Asian markets.

Excerpts from CNBC-TV18's exclusive interview with Mark Tan Keng Yew:

Q: How do you read this move from the Chinese authorities and do you think it could trigger off a big correction or will it be a fairly shallow kind of cut this time?

A: I think the authorities want to take measures to cool-off the speculation in the domestic Asia markets. But this is in my view a positive step in right direction.

I don't think it will be enough though because the hike in stamp duty fees is not adequate to stem the liquidity coming into the stock market in China.

I think the markets at this stage needs further measures in near term that could try to stamp down on speculation fever happening in the domestic Asian markets and so that is the reason for the sell off.

Q: Should regional markets be very concerned for what seems to be a localised issue at this point?

A: In theory, I don't think what is happening in the Asia market will impact rest of the region.

For one thing, Asian market is closed market to foreign investors; largely closed. And the fact that the valuations in Asian markets are higher than rest of the regional markets, which have much more attractive valuations.

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