Yi Xianrong Believes That The Current A Share Market Tends To Improve.

Last week, the Shanghai composite index hit 3400 points, hitting a two month high.

The turnover of two cities in Shanghai and Shenzhen increased to nearly 1 trillion yuan, which also hit a new high in nearly a month.

In addition, last week, the Shanghai composite index rose 6.5%, rising for second consecutive weeks. Its rise was the biggest increase in nearly 4 months since the stock market crash in late June and early July.

The Shenzhen component index also rose by 7.9%.

It can be said that these signs indicate that the current stock market in China is improving.

However, the fact that China's stock market is better now has little to do with the fundamentals of the macro-economy, because the fundamentals of the domestic macro-economy have not improved much since the data released today, and the pressure of economic growth has not slowed down much.

It can be said that the third quarter GDP data released on Monday (October 19th) was 6.9%, although it was better than the market expectations, but the real economic growth pressure has not weakened.

That is to say, at present, China's A shares are good, both the changes in the international market situation, and the result of the deleveraging of the Chinese market itself, which has little to do with the fundamentals of the macro-economy.

From a theoretical perspective or from an empirical perspective, the downward trend in financial market interest rates is the most important factor in stimulating stock prices to improve.

As long as we observe the trend of the US stock market since 60s, the stock market prosperity cycle is always linked to the low interest rate cycle.

For example, in 2008, the Fed's interest rate was pushed to its lowest level over the years, which is the biggest driving force for the doubling of the US stock market.

Therefore, at present, both China's interest rate in the financial market and the benchmark interest rate for deposit and loan are at the lowest level in history.

This will become an important factor in stimulating the current stock market in China.

Two, from the perspective of some economic data, the market is very anxious that the monetary policy of the Central Bank of China will be further relaxed and the interest rate in the financial market will be further lowered. It is also expected that the eighteen session of the five central conference will be held soon. Therefore, the "13th Five-Year plan" in the relevant fields has also become a driving force for the current stock market to rise.

Judging from the international market, the global market has not only swept away panic in the past few months since October, but also in many countries, the share price, the exchange rate and the price of goods rose at the same time.

Earlier, investors panic selling all kinds of financial assets, and this time they panic into these financial assets.

Actually, this wave.

The reversal is not only that the US's economic data are far less than expected, the market expects the fed to raise interest rates will be delayed, and even this year will not raise interest rates, so that the flow of funds to the United States will begin to flow back to emerging markets. Investors believe that the cheap money in the global market will continue to flood, and that oil producers are negotiating to reduce oil production to stabilize international oil prices, thereby allowing international oil prices to skyrocket, thereby driving the overall recovery of emerging market currencies.

In fact, in the final analysis, the international market is beginning to restore confidence.

Global investment market, confidence recovery, expected reversal, prices began to soar.

At the same time, I have been emphasizing that in the current global financial market, financial derivatives are so developed that stylized pactions are so prevalent (Wall Street is more than 70%, and the European market is 40%).

For example, in August, the exchange rate of RMB only declined by less than 3%, triggering a uproar in the global market, which is the result of international investment and hedge funds.

When market signals are better, these tools are also the vanguard of asset price inflation.

Earlier

The sharp fall is also related to these stylized pactions and financial derivatives.

For example, the prevalence of Chinese OTC capital allocation is the most important reason for the sharp rise and fall of China's stock market this year.

As far as the current situation is concerned, after continuous cleaning up, the overhaul of the off-site assets has come to an end.

In addition, regulatory authorities have adjusted the rules of stock market trading and stock market derivatives, and tighter supervision on insider trading.

These measures are conducive to the normalization of stock market self repair mechanism, thereby increasing the confidence of Chinese investors.

Recently, whether the volume of stock market has increased significantly or the 6 paction days of the two financial businesses have increased continuously, it is clear that confidence in China's A share market is beginning to recover.

At present, the most important reasons for China's stock market to start improving are mainly in the following two aspects.

First, domestic

Interest rates began to decline gradually, at the lowest level in history, and continue to decline according to the current trend.

The downward trend in the financial market not only means that the liquidity of the market is increasing, but also means that the financing cost of the market has begun to decline.

For example, the 10 year treasury bond issued in October 14th has a winning interest rate of 2.99%.

This is the first time it has fallen below 3% since December 2008.

This also means that the 10 year treasury bonds will return to the "2" era after 7 years.

Also, by the end of 2014, the 1 and 10 year treasury bond rates were 3.26% and 3.62%, respectively, and fell to 2.41% and 2.99% respectively in October 14, 2015.

The rate of interest in the financial market has been totally reduced. This is a change in the current economic growth downward pressure and China's economic restructuring task. The change of interest rate means that the central bank's successive policy of lowering interest rates since the beginning of this year has begun to guide short-term interest rates and long-term interest rates in the financial market, and the interest rate pmission mechanism in the financial market is playing a role.