The Shanghai Composite (SHA:000001) has surged 11% in the past month and officially reentered bull market territory while Hong Kong's benchmark Hang Seng Index is up 11%. The PBOC's rate hike is its first since 2007. Aberdeen, which manages $261 billion in assets, said the rate hike will help China's economy over the long-term.
The firm said Chinese equities still appear to be sporting attractive valuations and that investors are likely to keep pouring capital into emerging markets in search of better returns. The PBOC raised the benchmark one-year lending and deposit rates by a quarter of a percentage point to 5.56% and 2.5%, respectively.
Aberdeen is bullish on Chinese stocks over the long-term.