China Financial Daily

RMB revaluation will lead the stock market?
RMB appreciation positive impact on the stock market

Yangcheng Evening News: RMB appreciation, had been created in 2006 to 2007, an important factor in the magnificent bull market, the recent rapid appreciation, a lot of hot money flow back to China again, this will promote a new round of stock market rise?

Zhong Jing Teng: impact of RMB appreciation on the stock market is positive. Experience from the bull market in 2007, RMB appreciation and the appreciation of the expected lead to a lot of hot money inflows, thus promoting the rally. On the other hand, appreciation of the relevant section of the formation of another very good thing, such as aviation, paper, etc.. RMB revaluation would have on the financial and real estate section is good, but the appreciation and the last is different from a lot of pressure now control the real estate, property prices not only economic problems but also social issues, political issues, under the strong macro-control Property prices remain high, the public regulation of real estate are not satisfied with the outcome, the market is expected there will be a new round of regulation of real estate, real estate, rose plates difficult chance. The banking stocks and real estate is the twin brother. Round of RMB appreciation on the good level of financial and property sectors will significantly weaker than the previous round. Appreciation of the good not so strong in 2007.

Ke-Jie Li: RMB appreciation on the stock market preferences. Air plate benefit the most, on the financial and real estate of good can not be denied. Financial stocks at historically low valuations at present, is the most undervalued stock plate. Look at the performance of the Hong Kong H shares, stated that the Mainland and Hong Kong investors, international investors to judge the contrary. Hong Kong H shares of banking stocks, stock prices generally two or three percent higher than the A shares, we are not optimistic, and perhaps there is a significant opportunity. Mainland investors, real estate stocks are not to be optimistic, but this year, shares of QFII Masukura A quality property stocks. Hot money into the stock market, might be underestimated from these plates start with. Financial and real estate stocks this year, lagged the broader market appreciation of the RMB may become a turning point, a catalyst to promote the financial and real estate rose, pushing the stock market out of the wave of big price.

After the stock market is expected to take a good National Day holiday

Yangcheng Evening: Since the RMB appreciation positive stock market, why the stock market performance over the past week so depressed?

Ke-Jie Li: the recent stock market downturn is affected by holiday factors. Mid-Autumn Festival closed three days, until a few days to resume trade on it to the National holiday, hoarding or shareholders, investors know what to do, affect the investment enthusiasm. In addition, the blue chips in the financial and real estate have not formed upward trend, the early start-up boards stir in the crowded small cap bubble, sales. Large cap or small-cap stocks do not rise, the investment climate of course, suppressed. I expect the stock market in two cities after the National Day holiday to promote the appreciation of the renminbi, the broader market will gradually take a good.

Zhong Jing Teng: Although influenced by the holidays, but the index decreases in the two cities is limited, the valuation of bank shares on the Shanghai Composite Index considerable level of 1,600 points, the financial sector is a record, shut down the index space. However, the GEM stock sales. As the size of the non-GEM’s ban, the plate under increasing pressure, need to guard against this risk. Although the lower valuation of real estate finance section, but hardly a big market, the opportunity exists only in the next round of action compensatory growth. As the financial and real estate accounted for the weight between the two cities over Liu Cheng, will be difficult for them to contain broader market surged up space. But the stocks will be very exciting. Comparison of identified high-growth, not just speculative concept emerging industry shares, after full adjustment, still optimistic about the future.