Official Vigilance Against Potential Risks Will Introduce More Stock Market Control Measures

According to foreign media, the sharp fall in the Shanghai Composite Index in November 21st resulted in a sharp rise of nearly 20% since then, although the largest single day decline in five years has also occurred.

But the stock market boom and high leverage level have begun to worry the authorities.

According to Agence France-Presse reported on December 14th, China's official Xinhua news agency also questioned the sustainability of the increase in a commentary, warning that the "mad cow" under leverage.

The market risks built on leverages are obvious. Once the wind is changing, financing funds will rush out or trigger a cliff fall. Investors who use financing leverage may face great losses.

Analysts predict that

More and more

Control measures, but also said that the rest of the year, the Shanghai composite index is likely to remain at around 3000.

Insiders said: "when the stock market goes too crazy, the government will introduce some control measures to make it return to the track of rational profit.

After all, this is only the early stage of the bull market. "

He also said that the Shanghai composite index could hit 3500 points next year.

Kay investment macro also predicted that China's stock market will further rise, next year the Shanghai Composite Index will stabilize at around 3000.

The turmoil in the stock market has not stopped the pace of retail investors, and it is expected that retail investors will further increase.

Investor Yuan said: "falling back is normal.

Any bull market will suffer some losses in the process of rising.

I am not at all worried about that.

I think the rally will continue for some time until the 4000 point is slow and steady growth. "

Related links:

We do not think that the monetary policy of the central bank will turn to be more comprehensive in the year.

First, the central bank needs time to measure the policy effect of interest rate reduction in November, such as the degree of corporate financing cost reduction and whether the economic growth kinetic energy has been restored.

Second, the prevention of financial risks is also the responsibility of the central bank. The sharp rise and fall of the stock market caused by leverage is also unacceptable to the regulators.

At present, the cross market "carry trade" in low interest rate environment requires the coordinated supervision between the SFC, the CBRC and the central bank. Therefore, before the parties reach a unified regulatory framework, adopting a comprehensive policy easing will encourage the "moral hazard" sentiment in the market, which makes the central bank's attitude more cautious.

Third, the devaluation of the RMB exchange rate has restricted the monetary easing policy space.

In the offshore market with a high degree of marketization, the implied yield of RMB rose sharply to 4.37% in 3 months, reflecting premium rise.

We understand that if the central bank adopts a more radical monetary policy, it will easily lead to panic among overseas investors, which will lead to an increase in the expectation of depreciation.

Of course, this does not mean that the central bank is blind to the volatility of the financial market. We expect that "micro operation" will be the main way in the future, such as SLF, MLF and other innovative monetary policies to provide market liquidity, and ensure that the interest rate of the lending market is stable.

In addition, the dual rate corridor of "interest rate exchange rate" will form a new framework of price instruments for the central bank to regulate monetary and foreign exchange markets simultaneously.

From the point of exchange rate, we tend to be in a weak position in the coming quarter. The reason lies in the changes of the domestic and overseas economic and financial environment.

First, the export growth in November was only 4.7%, indicating that the growth of external demand has dropped. We have observed that after May, the real effective exchange rate in October has reached 121.6, which has recovered to a high level before January. We expect that the policy weight of the government to stabilize exports will increase with the weak exchange rate in the future.

Secondly, with the withdrawal of QE from the Federal Reserve, the emerging market currency index of Morgan JP has declined from 89 to 79 after May, and the depreciation rate has reached 11%. Considering the relative stability of the RMB against the US dollar, the passive appreciation rate of RMB against other non US dollar effective exchange rates is close to 13%.

Third, the overseas economic and financial environment will push up the US dollar exchange rate.

On the one hand, with the US economy improving, the Fed meeting on December may raise guidelines on raising interest rates, while abandoning the promise of "maintaining low interest rates for a long time", which promotes the interest rate of the US dollar and the US bond going up; on the other hand, the uncertain political prospects of Greece and Japan in Europe lead to a fall in the risk preference of investors, and the risk aversion is also beneficial to the US dollar exchange rate. 16.

Therefore, the weakening of the renminbi may reserve a certain space for the "further pegging" after the accelerated appreciation of the US dollar.

We understand that the depreciation of the renminbi in the early period to more than 6.20 is mainly based on the demand for risk avoidance pactions based on market expectations, rather than on the pressure of capital outflow.

On the basis of the current capital account's orderly management, the possibility of large-scale capital outflow in the future is not great. The central bank can maintain the relative stability of the exchange rate through appropriate market intervention, and choose the timing of intervention with the goal of currency delivery and support for exports.

From the perspective of the combination of price instruments in two rate corridors, the RMB will weaken in the next period of time, and the low interest rate between banks will be the mainstream.

At the same time, as for the exchange rate itself, with the diversification of participants, the elasticity of exchange rate will further improve, which, to a certain extent, also increases the flexibility of the central bank policy mix.