Yi Xianrong: Lowering Interest Rates, Anti Climax, Slow Or Normal?

For the stock market, lowering interest rates should be the most important reason for the rise of the stock market. Because the decline of interest rate or the reduction of social financing cost will help enterprises to increase their profit level, benefit the stock market's dividend yield relative to the market profit level, and directly enhance the stock value or valuation. This is the basic common sense of investment market. However, after the central bank cut interest rates on the first trading day, although the trading volume of the two markets has been enlarged, the stock index of both places has risen much less than the previous interest rate cut. Some people think that this is the stock market's anti climax after the central bank cut interest rates. That is, the actual operation of the stock market is contrary to the general theoretical analysis.

Because the market has been hyping the central bank for a long time, the stock market rose before the sheep rose. Although the central bank cut interest rates sooner or later than market expectations, but when the news of the central bank's interest rate cut once landed, investors will also borrow good news for shipment, and the stock market will have an anti climax. Therefore, yesterday's two cities' turnover suddenly rose about 800000000000 from usual 500 billion, which may be related to this situation. Of course, this is just an explanation.

Perhaps more important explanations may be in the following aspects. First, the central bank cut interest rates on the surface is symmetric interest rate cuts, one-year deposit lending rate fell 0.25 at the same time, but in fact, this is a serious asymmetric interest rate cuts. Because the ceiling on deposit interest rate rose by 10%. It can be said that in the case of a large deposit banking system in 2014 or a serious disintermediation in the banking system, the interest rate of the bank deposit would rise by 10%, which would be fatal to the profit level of the domestic banking industry. Because the upper limit of the deposit interest rate moves upward, the bank interest rate is more than 1/3. From the previous interest rate of 3.3% above the deposit interest rate, it has shrunk to about 2.1%. If the lending rate is not fully liberalized, the central bank's interest rate cut will have a greater impact on domestic bank profits. At home list The market value of banks accounts for more than 1/3 of the total market capitalization of the two places. If the profits of listed companies are reduced, and the valuation of the listed companies' stock prices move down, will the prices of the two markets go up?

Moreover, after the central bank cut interest rates, the stock market has an anti climax, which is the time for the central bank to cut interest rates. Because the central bank has cut interest rates before the two sessions, one has increased confidence in the conference and the market, indicating that the government has confidence in the current domestic economy and two is also testing the market. Because in the government work report of the two sessions, we will announce this year's economic growth target, the level of inflation and the amount of money supply. If the market predicts, the growth target of GDP, CPI and M2 in 2015 will be adjusted to 7%, 3% and 12% respectively. This means that the government has tolerated the slowdown in economic growth. If the central government tolerates lower economic growth, then the central bank's monetary policy will not be too radical. The central bank will move the next time to reduce interest rates, and will pay more attention to changes in domestic and foreign economic data. If the central government's tolerance to economic growth may be smaller than that predicted by the market, for example, when the GDP growth target is raised to 7.2% in 2015, the central bank's monetary policy may be radically shifted, and further reduction of interest rates will come one after another. It is also possible to adopt other policies to promote infrastructure investment and support the real estate industry to ensure short-term economic growth. So after the central bank cut interest rates, the stock market is actually watching its changes. Policy objectives Looking at the orientation of the government's economic policy. In this case, the stock market investors will retreat.

However, investors in the stock market should pay close attention to the serious contrast between the policy orientation of the stock market and the problems faced by the real economy. That is to say, I have been saying last year that for the Chinese government, faced with many problems in the real economic life, we hope to pass it. equity market Do more to solve. For example, the structural adjustment of the industry, the high cost of social financing, the serious debts of enterprises and governments, etc. Therefore, the central bank's interest rate cut is more than how much liquidity to the market, and how much the financing cost will be reduced for the enterprises. It is a clear and clear expectation for the market, and the government's orientation towards the stock market is very clear.

On the other hand, from the fundamentals of the real economy, because the government dare not want to solve the problem of "economic real estate", it is always thought that the so-called "economic real estate" cancer can be cured through the so-called bailout policy. This is the fundamental reason for the continuous downward trend of China's economic growth, overcapacity and the overall decline in corporate profits. It can be seen that the national industrial profit increased by only 3.3% in 2014, and the national industrial profit growth in 2013 was 12.2%, just 1/4 of the previous year. This reflects a sharp slowdown in industrial profits in 2014. With the downward trend of CPI and PPI this year, industrial profits are not optimistic in the first half of the year. Although China's stock market is dominated by speculation, it still has a great impact on the stock market. In the case of the real estate market is not optimistic, in February, the prices of the 100 large and medium-sized cities fell by 3.8%, which is even worse for the profits of industrial enterprises. In addition, the accelerated devaluation of RMB and outflow of capital will also have a negative impact on the stock market. So after the central bank cut interest rates, the stock market's anti climax is to lay a foundation for the slow cow, or to further observe the normality.