How Much Impact Of Tightened "Umbrella Trust" On Stock Market?

After a sharp fall in January 19th, Shanghai composite index once again hit a 5 year high after several trading days to January 26th, but began to shake again in January 27th.

Shanghai and Shenzhen two cities A share index fell sharply at a high level.

There are three reasons for the spread of the market. One is the sharp decline in the RMB exchange rate in the past two days, the lowest in 6 months. Two, the largest monthly decline in profits of Industrial Enterprises above Designated Size in December 2014, and three is the "umbrella trust" that the regulators will tighten up.

As for the sharp decline in the RMB exchange rate in the past two days, I have long pointed out that after the European Central Bank introduced the QE, the euro devaluation is a trend in the long term due to the excessive issuance of the euro.

The depreciation of the euro is bound to trigger an appreciation of the dollar and other currencies.

The renminbi is no exception.

But over the years, because the RMB exchange rate is more pegged to the US dollar, if the dollar appreciates too much, it will naturally increase the pressure on the depreciation of the RMB exchange rate against the US dollar.

However, the depreciation of the euro against the US dollar and the depreciation of the euro against the renminbi will not necessarily lead to the depreciation of the RMB against the US dollar.

It also depends on the assessment of the central bank's influence on the international market after the launch of the QE by the European Central Bank.

Over the past two days, the yuan has depreciated by about 2% against the US dollar. The market began to ask how much the renminbi would depreciate. How much international capital flows out of China?

Because, in view of the current RMB exchange rate, it basically can not jump out of the palm of the Central Bank of China.

The PBOC allowed the depreciation of RMB to increase, and it also tested the impact of the QE on the RMB exchange rate and its impact on China's economy.

Unless the central bank allows the flexibility of the RMB exchange rate to expand further, the appreciation or depreciation of the RMB exchange rate will not be too large, will be within the existing elastic range.

More importantly, the current issue of the RMB exchange rate, the Central Bank of China is placed on two basic points.

First, increase the flexibility of RMB exchange rate, reduce the unilateral trend arbitrage of RMB exchange rate by international hot money; two, accelerate the process of RMB internationalization and raise the status of RMB in the international market.

Under these two basic points, the RMB exchange rate has been seeking new balance.

Otherwise, how will a devalued RMB enter internationalization?

Therefore, because of the fluctuation of the RMB exchange rate in the two days, the shock of A shares can only be said that domestic investors are not familiar with the internal mechanism of the current RMB exchange rate change.

As for the decline in profits of domestic enterprises, according to the data already released, the profits of Industrial Enterprises above designated size decreased by 8% in December 2014, the largest monthly decline since October 2011.

This, of course, shows the challenges faced by industrial enterprises, the main driving force of China's economy.

It can be said that as long as the cyclical adjustment of the domestic real estate market is continuing, the situation of domestic overcapacity and the continuous decline of PPI will not change, and the profits of Chinese industrial enterprises will not be able to improve.

This will have a great impact on the profits of listed companies.

In January 27th, the slowdown in profit growth of European and American giant enterprises also led to a sharp fall in European and American stock markets.

The same is true.

But there is no correlation between the profits of Chinese enterprises and the trend of China's A share index.

That big.

The market has long been rumoured to tighten the "umbrella trust", and management is stepping up the corresponding regulation.

Because this round of stock market craziness is not only related to the rapid development of margin trading, but also to the excessive expansion of the "umbrella trust" of domestic banks.

So far, the scale of domestic margin trading has reached 1 trillion and 100 billion yuan, while the scale of "umbrella trust" has reached 200 billion yuan to 300 billion yuan.

Therefore, the market is more sensitive to tighten the "umbrella trust".

It is reported that the "umbrella trust" of domestic banks is tightening.

For example, take Everbright Bank as an example, the non A-class customer allocation can be 1:3, and now it is reduced to 1:2.5.

If this proportion is tightened and the current financing amount is 300 billion, then deleveraging will reach 75 billion yuan.

And this "umbrella trust" is likely to tighten.

For example, the Shanghai index is 2400 points, the leverage is 1:4, now it is 1:3, and the future may be 1:2.

There may be both regulatory requirements and market reaction of commercial banks.

Because,

Rising, reducing leverage ratio is a normal reflection of banks.

Markets need not be overly interpreted.

Moreover, the regulation of "umbrella trusts" by domestic banks has already been formulated by the management, and the market should have prepared for this.

Moreover, the "umbrella trust" is not only far smaller than margin trading, but also a small product.

In domestic banks, if customers do not have the corresponding amount of funds, they can not get financing through this tool.

However, as I have pointed out long ago, the characteristics of China's A shares are now expected to come quickly and go fast, and any market moves are likely to arouse.

Huge waves.

So, although regulators' tightening of the "umbrella trust" will not have a big impact on the stock market, investors should be careful.

Investment evasion is always greater than gain.