Category: Money Tips Date: 2007-01-15
Source: Guangzhou Bandung
Abstract: Based on the current rapid credit growth has been rapid growth in fixed asset investment and other issues, the central bank will eventually take the appropriate monetary policy tightening. This will result in excessive monetary liquidity situation fundamentally changed and ultimately undermine the basis of the first phase of the bull market for the first phase of the bull market in a substantial adjustment will inevitably face ......
We believe that the banks began to contract the currency liquidity will be the end of the first phase of the bull market, a substantial adjustments in the beginning of the underlying factors. This is based on one of our basic judgments, to create a basis for the current round of bull market liquidity factor is too loose, this one has brought a lot of asset prices, such as housing prices, non-ferrous metals prices push up the mainstream plate; second is a market capitalization of sufficient in itself also contributed to the development of bull run more smoothly. However, we believe that the current liquidity situation is too loose will be under the influence of the central bank monetary policy change, to change the inevitable bull market based on the first phase of the bull market has brought to the market after a major adjustment.
We can interpret the central bank released the first quarter of 2006, China's monetary policy implementation report it out of this. In this policy report, the following points deserve our attention:
First, excessive monetary liquidity has become a major problem
The central bank monetary policy report that high liquidity and other major issues, the current overall situation of China's economy, though good, stable financial operations, but requires a high degree of concern about excessive growth of fixed asset investment, foreign trade structural problems are conspicuous, excessive liquidity, as well as global economic imbalances are likely the risks to our country and other issues.
Among them, we should be able to see "high concern" the meaning of the word, that is, the central bank on the current situation is already very alert, explain the situation is very serious.
First, the excessive growth of fixed asset investment has become an economy that affect the healthy development of China's major problems. The first quarter of this year, domestic investment grew by 27.7% to maintain a strong momentum to the investment in fixed assets in April grew by 29.6%. This corresponds to the first quarter, year on year GDP growth of 10.3%, significantly higher than the previously released 2006 economic growth forecast of 9.1% in value. Secretary for the Ministry of Finance's economic construction Hu Jing Lin is expected, according to the current growth rate, the year will complete the investment of 10 trillion yuan more than the investment rate this year will exceed 50%.
Excessive liquidity is another major problem. In particular, broad money M2 growth, the end of 2006, 3, the broad M2 money supply, the balance of 31 trillion yuan, up 18.8%, lower than 4.7 percentage points over the same period last year, M2 growth has been scheduled for months over目标.
In fact, excess liquidity and rapid investment growth in fixed assets can be said that two aspects of a coin. In China's direct financing market is not well-developed cases, the indirect financing rapid credit growth mainly a direct result of excessive liquidity problem, and a large number of low-yielding currency and flooding that will inevitably lead to irrational investment in fixed assets increased rapidly.
Second, to prevent the excessive growth of credit, will become the main objective of
The central bank in the first quarter monetary policy report said that the existing basic policy is to continue to implement prudent monetary policy and maintaining policy continuity and stability, reasonable regulation and control money and credit the total amount of foreign currency to strengthen policy coordination and improve regulation of the active sex, prevent excessive growth of monetary credit for the economic structural adjustment and economic growth pattern to provide a stable monetary and financial environment.
One initiative to improve regulation and control and prevent the excessive growth of credit, monetary policy and the description of this most worthy of concern. First, the initiative to improve regulation and control, which means that the central bank will continue to implement the follow-up of a series of tight monetary policy measures. Second is the description of credit growth is "rapid growth", which indicates that the central bank's credit growth on the current status of a basic determination. The reality is the first 4 months of this year, China's RMB loans of financial institutions in 1.574 trillion yuan, has spent the whole year's target of 60%.
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We can not think so, following the central bank in May to raise lending rates by 0.27 percentage point, directional release 100 billion central bank bills, the excess liquidity within the banking system will not completely solve the problem and to control credit growth target still a long way . The central bank to control credit growth will become the next major direction of monetary policy, which may use, including raising the reserve interest rates, interest rates, issuing bills, window guidance and other monetary policy tools.
Third, in June introduced the possibility of tightening monetary policy less
The short run, continue to produce a tightening of monetary policy less likely. In June will be the central bank may observe the main, it is because since the increase in lending rates, directed issue bills for the real estate industry in the country six and the corresponding concentration of quantitative measures in May after the introduction of the central bank should be the effect of the policy there is a follow-up observation period.
Some experts believes that the reserve ratio to adjust the near term policy initiatives such as the possibility of reducing, or at least demonstrate the need for market regulation to achieve the policy of the previous stage effect, it may re-take the appropriate response.
4, while the medium term, follow-up introduction of tighter monetary policy is very likely
Although the central bank in the short term to take austerity measures, less likely, but that does not mean that monetary policy has been introduced sufficient to suppress the current excess liquidity problem. In the medium term, the central bank is likely through a period of observation, further to take corresponding measures. This is because: first, the first few months of this year's money supply and credit growth rates, both the inertia of growth is likely to continue for some time, governance "in troubled times," You need to use heavy penalties. Second, exchange rate system reform inevitably brings Waihuizhankuan increase, which will be the next troubled by the independence of monetary policy, a key aspect, in order to suppress the resulting problem of excessive liquidity, the central bank will eventually be forced to take corresponding measures to recover this part of the liquidity.
In summary, we believe that the medium term, the central bank to tighten monetary policy, introduced the possibility of very large, it is because the current monetary situation is awash with liquidity, and is not optimistic. The reason why the central bank to maintain do anything in the short term trend, mainly due to the market data should be a requirement for further observation, while the corresponding select a more appropriate monetary policy tools.
Tightening of monetary liquidity will have a major impact on the current round of the bull market. Real estate, non-ferrous metals such as excessive liquidity on the basis of being thrown off the high price will eventually drop the tightening market funds to expedite the issuance of new shares with a market capitalization of increasing pressure to become the main reason for the adjustment of the first phase of a major bull market appears inevitable, is now in shock as the top before the adjustment phase, which we have been stressing the compensatory growth phase.
We believe that this adjustment is the first phase of the bull market in full-taking and all the unfavorable factors of the first digestion, at the same time lay the foundation for the second phase of the bull market. In the short term, the market will also be made to maintain the top of the pattern of shock or even keep a small record high, numbness and confusion most of the medium and small individual investors to adjust positions for mainstream funding to buy time. From the medium term, compensatory growth Quotes will eventually tighten monetary policy under the influence of unfavorable factors such as the end.
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