Category: Money tips Release Date: 2006-05-18
Source: Guoxin Securities Author: Chengying
The long-term trend is likely to boost the appreciation of the yuan and the interpretation of a larger bull market, so we observe from the strategic vision of RMB appreciation on China's stock market impact. A fairly long period of time, as long as the yuan appreciation expectations do not change, continuous inflow of international capital, the driving force of China's stock market will not reduce its impact for the stock market will be greater than the economic growth and the impact of company performance factors, and thus on China's stock market strength to form a strong impetus.
A stock goes up round the main reason for the appreciation of the renminbi. Early real estate stocks, banking stocks rose sharply is proof. We can also find sources of funding to promote higher index is obviously not a domestic fund, is also not a broker, these institutions prior to the current round of increases, and I do not have enough idle funds; real financial power may come from international capital, in these capital induced by domestic private capital, ordinary investors and domestic funds swarm.
Current promotion of China's stock market were really the driving force is the appreciation of the renminbi, combined with excess supply of yuan, while the relevant market less attractive for funds, so we have reason to conclude that the next two to three years, China's stock market may interpret a decent Quotes. Here, decided to speed up the rate of increase, and may be China's exchange rate mechanism reform process. High-impact of this process the extent of the influx of foreign capital.
As the appreciation of the renminbi's influence on the index depends on the yuan to appreciate the extent, therefore, renminbi equilibrium exchange rate should be how much is the key. Comprehensive evaluation, we believe that the yuan may be undervalued by about 20% to an annual increase of 4% and compound interest formula, China's yuan revaluation is about 5 years or so, when, during an estimated 3 years and 2 years of the bull market adjustment of yuan appreciation of about 18% when the index will reach a high point, the above card index measure, the Shanghai index up about 6,900 points, considering factors such as stock reform this year, the Shanghai index is expected to reach 7,000 points. But it is worth attention is that the continuous expansion of the stock market will inevitably suppress the index was up speed and the rate of increase, which will make the index points are discounted.
At present, China's long-term appreciation of the yuan is entering the track stock market is in a bull market in early stages. Therefore, investors should actively invest in stocks, according to whether the listed company's products and product import and export trade of exchange rate flexibility, select the relevant industry and company investments. In addition, the external friction intensified and appreciation of the existence of the pressure, but also will force the country's economic development strategy from the "export-oriented" to "expand domestic demand," change and consumer demand-related sectors and companies will benefit, these industries and companies are also worth concern.
