Category: Money tips Release Date: 2006-05-01
Robust economic trends are expected to amend the front China's economic strength by the market underestimated the vast majority of economists in the second half of 2005 were revised upward macroeconomic data, we believe that this amendment in 2006 will continue.
From the long period, China's economic growth rate in the slow decline, but such growth is still is universally rare. December 20 Bureau of Statistics published the results of the first economic census, China's GDP value of 2.3 trillion yuan, of which the added value of tertiary industry contributed 93%. This adjustment is already present in the economy will resume its proper face the facts, there could allow the capital market is expected to produce fundamental changes in the macroeconomy: the total amount of the economy has been underestimated, the contradiction between the economic structure has been exaggerated, the Chinese economy than the imagine a more robust and continue to maintain relatively fast growth potential that needs to upward revisions.
Start of domestic demand is an important policy direction for the future is expected in 2006 will maintain a steady growth in consumption, but did not become a major driving force of economic growth; investment will still maintain a rapid growth rate, from government departments, the growth of investment in infrastructure the business sector can compensate for the decrease in autonomous investment; export growth rate fell a great possibility. Global resource prices ratchet to see an empty expect to continue to fall through Since 2004, international resource prices rise, oil, natural gas, iron ore, copper, zinc, gold and other resource-based commodity prices hit record highs, at present, the stock market's view on commodity prices pessimistic attitude, influenced by traditional economic theory of the the impact of the majority of investors in commodity prices will ultimately be found to return cycle, the starting point.
Our diametrically opposed views and market consensus. In our view, the resource-based commodity prices will not only not in 2006, fell sharply, and even future long-term maintenance of high resource prices are rising, falling, all the bearish forecast will fall through.
First, we must see that in the 90's great bear market in commodities, resource industry has undergone a fundamental change in structure, integration is very full and oligopoly in the market has basically taken shape, and the supply side capacity control capability is very strong, and look forward to increase the formation of a large number of reasons for the price war is not sufficient; Secondly, in the past one cycle, the world economy's overall structure has undergone tremendous changes, with the ability to adapt to high energy prices is increasing, although the past two years, resource prices keep a record high but have not caused a drop in demand, world economic growth momentum remains strong.
Furthermore, the continuous accumulation of global liquidity will inevitably push up land prices of commodity resources.
As China's special economic environment, domestic resource prices have been seriously distorted, well not reflect the true level of the market in 2006 will be a good time to sort out the price mechanism, to Development and Reform Commission as the representative of the government departments over the next control object pointing resource prices. Expect, "Eleventh Five-Year" period will be further reform of the oil circulation system and price formation mechanism, the formation of the oil market, market-oriented economic management system; further promote the reform of natural gas price mechanism; comprehensively promote the water price reform, including expanding the scope of water resources fee collection to improve collection standards, improve agricultural water prices; a comprehensive introduction of sewage treatment fees.
A stock attractive to enhanced flow of capital significantly Excess liquidity is that this round of global economic growth, a special phenomenon, the bond market in China over the past year only by the liquidity push up the market. However, things are reincarnation, the bond market is now almost become a bank and money market funds had to play the game because of the poor rate of return is difficult to demand deposits to attract funds from outside the composition; real estate market in some areas while still good, but generally the cautious attitude of the ability to absorb more funds to make it shrink considerably. At the same time, the money supply remained at a higher speed, or even the government want higher rate. From the long-term historical trend, due to China in the international industrial division of labor in the inferior position difficult to improve the whole society, the average return on investment is expected to long-term slump, the interest rate environment will remain relaxed. However, due to a share of investment in GDP has reached unsustainable highs, while the consumption growth rate, limited distribution system, social security, and a series of exogenous factors, therefore, the central bank's monetary policy is likely to be wide large sums of money to push into the asset transactions, even in the current state, we also tend to think that money-driven rise in the stock market had become a fundamental improvement.
Trends - the end of the bear market Trend is a collection of popular psychology. In the past five years, we have been living in fear of the crowd, each transmission fear. We believe that the most pessimistic market sentiment has ended, in June 2005 Shanghai Composite Index fell below 1,000 points, completed a collective psychology of Nirvana. Today, faced with the same market, the same system, the same problem, and optimistic sentiment is cross contamination, which is the basic symptom of the market to reverse the trend. As the troubled market, the major fundamental problem - the problem was finally split share is expected to end, and the solution is generally consistent with market expectations, the future institutional change will be more favorable toward the market direction. We are out of the new trends in the stock market have a strong confidence.
The sky to find profitable The stock market, only the up and down the two concepts, as more and more people realize that fell without space, we have been actively looking for up space:
(1) market expectations from pessimism in the wake We believe that the greatest opportunity for the market comes from the "expected from the pessimism in the wake." According to our survey, the market in 2006 is also essential to determine the conservative side, most of the Shanghai Composite forecast between 1000-1350, and in fact, the major negative factor to control the market has been the basic expectations and be reflected, while the Lido factors not yet fully understand the market, in particular, the system changes will bring long-term, fundamental lack of good understanding. We believe that in order to split share structure reform as the core of institutional change will not only enhance the A-share market's overall valuation, but also long-term growth of capital markets to open space. In the current bear market the more common mode of thinking under the influence of the market over-concerned about the short-term negative factors, and there is a negative factor for the limited tendency to enlarge, we believe that this is the best chance of the overall market this year, we forecast that this year the Shanghai Composite rushed for more than 1,500 points, the probability greatly.
(2) system is a historic opportunity for transformation In 2006 will be a year of frequent system innovation, from the current point of view, in 2006 more significant institutional innovation has market value assessment and equity-based incentives, directed to issue additional convertible mergers and acquisitions, and the further introduction of margin trading futures and other derivative financial products. The introduction of these institutional changes, will change the operation of the existing structure of capital markets to enhance the overall A-share market valuation, but also long-term growth of capital markets to open space. The most important thing is the market value of assessment and equity incentive supporting policies:
Market value assessment, and equity incentive package of measures introduced, would be a major catalyst for the market strength. We believe that many Chinese state-owned enterprises is a great potential to be developed, if the management personnel can really mobilize the enthusiasm for future growth performance will surely be a positive stimulus. We have always maintained that China's economic growth, in addition to the traditional investment, consumption and net exports, three-pole, is in fact there is a pole, which is efficient. From the rural household responsibility system, the liberation of productive forces, to the individual, private and other non-public ownership economy is gradually stronger demonstration of institutional change resulting from efficiency gains tremendous contribution to the overall economy. MBO of listed companies the previous two years in practice, we have seen all this potential.
Pre-split share structure, A-share market value of the investment is defect, the main reason is that control of listed companies, major shareholders and management and circulation of existing differences in interests of shareholders, circulation, lack of effective protection of the interests of shareholders, giving rise to discount the value of This is A-share market price-earnings ratio is lower than in mature markets one of the reasons; the introduction of market value of assessment and equity incentives, and equity goals will maximize the value of listed companies, major shareholders and business management to the formation of enormous benefits for drivers to facilitate their efforts to improve the company's operational efficiency and improve company performance, on the one hand it will greatly improve the prospects for the profitability of listed companies, thus contributing to the rising stock price; the other hand, investor confidence, the value of discount disappeared, and further lead to higher stock prices. Therefore, we believe that the market value assessment, and equity incentive package policy introduced in 2006 the market was a major event in A-share market will have a profound impact on the trend.
(3) the opportunities brought by economic policy "Eleventh Five-Year Plan" proposed "energy conservation, environmental protection, support for technological innovation, regulating income distribution, to accelerate rural development, improving people's lives a sense of security and quality of life," the grand objective of supporting policies and measures is expected to be introduced in succession in 2006, . We will pay close attention to the following opportunities: A total of 2 1 [2]
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