Category: Money tips Release Date: 2006-02-15
Source: Guangzhou Bandung
Abstract: The objective of excess liquidity conditions, economic development, partial heat, the trend of price increases will continue. In order to solve the problem of surplus funds, the management only when the stock market to become a "flood pool," and effectively address the financing imbalance caused by various problems.
In the objective of excess liquidity conditions, economic development, partial heat, the trend of prices will be maintained. At present, only to develop market-based capital markets, be trained as flood pool of surplus funds in order to effectively solve the financial imbalance caused by various problems. Therefore, raising interest rates not only overwhelm the bull market did not become the last straw, they became the engine of the bull market.
1, the economy overheating, the trend of price increases to maintain
The objective in the current environment, the economy overheating, the trend of prices will be maintained.
1, although the central bank to raise interest rates, but in fact the state of negative interest rates will remain
Up from a static calculation, due to hike the interest rate of 3.33%, after deducting 5% of the interest tax, real rate of return of 3.1635 percent, a figure slightly lower than the CPI growth rate of the first half of 3.2%.
However, according to a standard to calculate the dynamics, with the official released in June compared with 4.4% CPI, the current negative real interest rates, considering the rising prices of factors, then the level of negative real interest rates higher than this data shows. In other words, from the current trend of rising commodity prices, interest rates should in fact be a negative 1.2%.
2, the state of long-term maintenance of excess capital
Fundamentally speaking, the current economic development of partial heat, price rises too fast are all the excess supply of base money, cash flow is closely related to fast. From Taiwan, Japan, Korea, Germany, and other regions and countries of the circumstances, this is the currency appreciation, regulate internal and external imbalances in economic development, an inevitable phenomenon. Even though greatly enhance the level of interest rates (eg Germany), the situation of excess funds remain long-term maintenance, but the growth rate may slow, but can not be reversed. And if the interest rate the level of increase is too large, it will increase the pressure of RMB appreciation, may stimulate further capital inflow, while it makes the excess capital inflows into the banking system, increasing the burden on banks. This has also allowed management to make decisions when the interest rate then a legislator.
3, control without actually lengthening the cycle to reverse the price rises
In the context of excess monetary resources, it is difficult by purely monetary measures, or foreign exchange investment management companies, such as ways to transform the economy overheating the footsteps of rising prices. Only the adjustment of industrial structure in order to truly solve this problem, but it will be a slow and long process.
So, in practice the cycle of price increases has not been reversed, but may be stretched because of the additional interest rates, the rate of increase tends to slow, and thus can maintain a steady pace of domestic economic restructuring and to provide a better environment.
Overall, the economy of excess liquidity led to fast growth of prices is still the situation will be maintained.
Second, the proportion of indirect financing and direct financing imbalance ----- flood the stock market into a liquidity pool
China University of Political Science, Professor Liu Jipeng claimed, the current economic overheating is the problem of financial structure, namely, the proportion of indirect financing and direct financing imbalance. Relying on indirect financing of commercial banks to invest directly lead to overheating, the fundamental solution is to vigorously develop the capital market, the development of a hard budget constraint of private investments and the direct mode of financing.
We believe that this is the treatment of the structural development of the current economic overheating in the main crux of the prescription. Have to solve this problem, the only way that is, efforts to develop market-based capital markets, and thus greatly enhance the proportion of direct financing, so that the stock market eventually become a flow of flood pool. So, ultimately, the economic structure optimization and the development of overheating problems, the continued growth and the stock market inevitably interlinked.
Third, the policy side agree that the sustainable development of the bull market it is reasonable to
We believe that, due to excess liquidity and the expected economic trends and policy dimensions of sustainable development are also recognized the current bull market is reasonable, and this greatly expanded from the management of the Fund's size and broaden the scope of insurance funds to buy shares can be seen.
At present the Fund's distribution rate of expansion into a new climax, while China Insurance Regulatory Commission to allow insurance funds to buy the high st and some blue-chip gains. This shows two things:
1, management recognized the reasonableness of the current stock price, which also contains estimates of the economic outlook. The blue-chip current pricing levels, and policies dark side is permissible; right ST restructuring actions, the management's attitude is not self-evident reality, and For the current types of regulatory measures, but in order to ensure the continued stability of the market only.
2, the management control measures before the objective is to change the outcome on the market in the capital structure, so as to lay the foundation for the market's long-term stability. And because capital structure optimization, the market also appears to be more rational to reduce the pressure on the policy side control and risk.
