Category: Money Tips Date: 2006-08-04
Main points:
The market is about to enter a larger adjustment period, and will continue long period of time off policy is the last straw Jigen.
Main reasons are as follows:
(1) full circulation is expected under the Chinese stock market, its inherent deficiencies in the system and the structural contradictions in the short term is difficult undergoing a fundamental change in share reform needs an adjustment after the completion of the process, the prevalence of speculative credit shortage environment, non-negotiable shareholders with the cost advantage of natural information to induce their behavior Alienation - information superiority in order to manipulate stock prices to reap huge profits, which would have greatly undermined investor confidence.
(2) the impact of China's economy in the troika: the slow decline in investment growth trend was already evident; consumer demand due to income growth, social security, is expected to uncertainty and other factors is difficult to achieve rapid growth; net exports due to yuan appreciation is expected to be severely affected. The dangers of excess production capacity will gradually emerge, deflationary pressure will be increasing. A few points to note: First, economic growth in 2005 largely due to the contribution of net exports (contribution rate of 35%, while in 2004 no more than 7%), in 2006 this situation difficult to sustain ; Second, the price system may help curb the decline in prices, but the price reform in these areas will be restricted to a certain extent, economic growth, despite the long term, help to improve the distorted price relations. Third, low interest rates has been going on for many years only serve to distort the relationship between capital supply and demand, the effect of macro-control will be adversely affected, the damage on the economy will gradually appear.
(3) The appreciation of the renminbi is expected to: China's stock market will not be a second Japan. Japan and Taiwan's experience shows that currency appreciation of the stock market to promote beef, but the Chinese stock market may be difficult to reproduce. In this regard because the yuan are still under strict control; 2 is the sharp appreciation over China's interest. RMB to appreciate too, although you can attract capital inflows, but the result of the appreciation of the Chinese economy will also be very destructive and will eventually be reflected in economic growth, especially in the decline in investment and consumption in the current shortage of difficulties, the appreciation of impact will be magnified. Economy has been suppressed, capital will soon be out, causing fluctuations in the economy rose. Therefore, management can not allow this to happen, it will not allow large-scale inflows of international hot money, which is why the recent management has been pushing for the yuan decompression, such as QDII, change the "lenient entry, stringent exit" foreign exchange policy, Tibetan Meeting the people and so on, rather than letting the yuan appreciate.
(4) The starting point of the stock market on policy is to promote the normalization of the capital market functions, but not a big bull market. Although management will work hard to avoid the market crash, but its policy efforts to save Shangyuan is limited, which is determined by the policy stance of the. At the same time the introduction of a number of macroeconomic policy will also have a greater impact the stock market, mainly in three aspects: First, relax and encourage the exchange abroad, such as QDII, possession of Meeting the people at the same time out to relax the restrictions; second is the insurance capital investment in the direction of adjustment; 3 is not limited to the stock market introduction of new financial products; Fourth, the overall macro-control policy to control investment, and guide the growth mode, the process is difficult.
(5) expansion pressures applied to the equity holders, the holders of the need for capital, for both the expansion of stock reform, or initial public offerings, more of a chance. Holders of capital who would prefer full circulation of the new shares, from the diversion of funds and Bijiaxiaoying two markets in terms of repression.
(6) institutional reform and economic growth pace of change and effect, can not have too optimistic estimates of ice three feet thick cold day, whether from the micro-foundation of China's economy, or from the enormity of the reform of government administration and so we have reason to hold a more cautious attitude.
