Category: Money tips Release Date: 2006-04-28
Shenyin: H shares valued above the general level of adjustment pressures in Asia Opinion: index of adequate response to the expected H shares from October 2005 up to the 4770 points in February 2006 of the 6700 points, or up 40%, PE increased from 12 times to 16 times. Index from the current analysis, both the surface and macro fundamentals, or financial side of good is expected to have carried out a relatively good response to H shares is expected to 6700 points will become the high point of the short-term future, a downward pressure is expected to H adjustment of target shares 6,000 points.
1. U.S. interest rates led to reduced inflow of funds Round of the main boosters H shares Quotes continuous inflow of overseas capital H-share market, the continued inflow of foreign capital in the market from the two main reasons: First, the RMB appreciation; second, a falling dollar and low interest rates against the background of The global capital is awash with liquidity. The second half of 2005 began a sustained moderate yuan appreciation, H shares are also higher then bottomed out and gradually stabilizing.
However, from the current trend analysis, in 2006 the United States to continue to raise interest rates may lead to inflow of funds into short-term changes in H-share market trends. Since 2003, the Federal Reserve continues raising interest rates, from 1% to the current interest rate rises to 4.5% in early 2006, the market in 2006, the Federal Reserve is widely expected to push interest rates up once, but the new Federal Reserve Chairman came to power and the U.S. economic data was better than expected the market to adjust expectations, and currently they basically think that in March 2006 and May and there may be two times interest rates.
4.5% compared to the United States interest rates, both the level of interest rates in Hong Kong or China has a considerable gap, once the United States continues to raise interest rates to reach 4.75% or even 5% of the neutral level, may cause the funds in the Hong Kong market there back and make the yuan appreciation has slowed, the adverse impact on the H shares.
2. Local Valuation High H shares has been and the Korean market is Asia's most expensive markets in the world, in 2001 the level of H shares of PE is only 6 times, with the emphasis on overseas markets for Chinese assets, the degree of upgrading, as well as China's rapid economic growth in the explosive performance of H shares of growth, so that the level of H-share market valuations continue to rise in the first half of 2003 reached its peak stage of 20-fold, and then with the context of macroeconomic regulation and control, H shares fell sharply, the minimum of 10 times.
Appreciation of the renminbi in the second half of 2005 making China the value of assets was again concerned about, H-share index also soared in the valuation levels continually rise, in February 2006 the level of H shares has reached 16.33 times PE value of the process of return to the fundamental has ended.
H shares more than 16 times the valuation of PE and the Asian region, compared to appeal has been very limited, the fundamentals of good has been adequate response in the valuation. From the industry point of view, the appreciation of the performance-based vision, H-share listed financial stocks, including banks and insurance are being sought after in the current round of higher energy prices, stock prices soared, banks and insurance stocks at present valuations significantly deviate from the basic surface, once dropped on the market have more negative effects.
3. Macroeconomic upside down suppression The macroeconomic expectations are the basis for judging the stock market, we are in mid-2005 asset allocation report, had an inspection tour of H-share index and the GDP, fixed asset investment correlation was found correlation is very high.
Recently China has adjusted the GDP data, we adjusted GDP and the re-analysis of H-share index is still obtained a high correlation. 1993 -2004-year H-share index and the GDP (adjusted) correlation to 0.87, with fixed asset investment reached 0.91 correlation.
According to the Institute Shenyin macro macro-policy analyst at the Department of macro data for 2006, forecast 2006 GDP and investment in fixed assets in 2005 will appear more clearly down, so the H-share index negative impact from the macroeconomic point of view .
4.2005 Annual Report of the performance growth fully expect to March is the annual disclosure of H shares stage, the annual results of listed company's share price impact can not be questioned, the report released after the company's share price will be based on performance and expected future realignment, we believe that since 2005, the month of H-share index has basically been the sharp rise reaction 2005 Annual Report of the revenue growth.
Profit growth in 2005 is expected to more than 30% of the companies list of list of a total of 3 1 [2] [3]
