What Is The Impact Of Frequent Injection Of HKMA On Hong Kong Stocks?

The Hongkong Monetary Authority (HKMA) has injected 8 billion 370 million Hong Kong dollars into the market again today.

Since the beginning of September, the HKMA has repeatedly sold the Hong Kong dollar to stabilize the exchange rate, which has exceeded 100 billion, indicating the market.

Strong.

Some analysts believe that part of the Hong Kong dollar is likely to enter the Hongkong stock market.

Overseas research team led by Everbright Securities analyst Chen Zhizhong has different views.

They believe that although the demand for new funds to exchange Hong Kong dollars is strong, the demand for foreign exchange (especially US dollars) for Hong Kong dollars may be weak.

According to historical experience, this means that a large amount of capital has not entered the stock market directly after entering Hong Kong.

Everbright overseas research team believes that for the current Hong Kong stock market, the overall pressure of the market environment has not improved, stock funds into the market power is insufficient.

In contrast with historical cases, it should be noted that "Shenzhen Hong Kong" news may lead to changes in market tempo, thereby attracting stock funds to accelerate the market.

In the semi annual report on currency and financial stability released in September, the HKMA said that the strong exchange rate guarantee for Hong Kong dollar spot exchange has been triggered many times since the end of August, which may be caused by the redistribution of assets due to the depreciation of the renminbi.

Some of the funds may be sold into Hong Kong dollars after the Hong Kong dollar is sold back to Hong Kong dollars.

Lai Chunmei, senior market analyst at the Bank of East Asia's currency and interest trading department, said that funds had been flowing into the Hong Kong dollar market for more than a month. I believe some of the funds were supported by the low valuation of Hong Kong stocks, and now that the RMB appreciation prospects are not good, some of the funds are believed to have been pferred to the Hongkong stock market.

The Chen Zhizhong team believes that, according to historical experience, capital has not entered the Hongkong stock market directly after entering the capital stock market.

First, the Hong Kong dollar exchange rate strengthened.

Continuous injection of funds indicates that capital has continued to flow into Hongkong since the end of August.

From the sum of the aggregate sum and the cumulative growth scale of the monetary base, the scale of the current capital inflow may be comparable to that of the fourth quarter of 2012.

Secondly, as the foreign exchange position in the banking system is updated to July, we can not know the change of foreign exchange in the period of capital inflow.

But referring to the change in the size of foreign currency (M3, savings), we believe that the growth of foreign exchange positions in the banking system may be relatively limited.

In other words, although the demand for new funds to exchange Hong Kong dollars is strong, the demand for foreign exchange (especially US dollars) for Hong Kong dollars may be weaker.

According to historical experience (08H2), this situation represents that the capital has not entered the Hongkong stock market directly after entering the capital market.

This also explains why the Hong Kong stock market has limited benefits from recent capital inflows.

Since August 11th

After a significant depreciation, the Hong Kong dollar exchange rate has rarely deviated from the Hong Kong stock market trend.

Initially, the market expected the Hong Kong dollar to depreciate against the US dollar, but soon after the end of August, the Hong Kong dollar had a rapid appreciation, hitting 7.75 of this strong exchange guarantee.

In order to stabilize the exchange rate, the Hongkong monetary authority has repeatedly intervened in the foreign exchange market.

From September 1st to October 22nd, the Hongkong monetary authority has sold 21 Hong Kong dollars and bought us dollars in the market so as to stabilize the Hong Kong dollar exchange rate. The total selling scale of the HKMA is HK $127 billion 490 million.

This is not only faster than the two quarter of mainland funds to accelerate the entry period, and more than the 2012 Federal Reserve launched the third round of the QE period (October -12 months).

With the massive injection of funds from the HKMA, the Hongkong foreign exchange fund banking system has achieved a record high.

After the latest injection of HK $8 billion 350 million in October 22nd, the balance of Hongkong's banking system will climb to HK $403 billion 160 million in October 26th.

According to the current linked exchange rate system in Hongkong, the exchange rate of the Hong Kong dollar against the US dollar is HK $7.80 to US $1.

The HKMA will buy US dollars from licensed banks at the exchange rate of HK $7.75 to US $1, and will sell US dollars when we reach a guarantee of HK $7.85, so that strong and weak convertibility guarantees can operate symmetrically with the HK $7.80 of the linked exchange rate as the central point.

Referring to the market trend of 08-09, the flow of funds in Hong Kong has reached a high level in the second half of 08.

However, until the 09 quarter of 2 quarter, the stock market began to enter the Hong Kong stock market after the bottom of the Hong Kong stock market rebounded. (09 years, 3 months, and the net position of foreign exchange increased sharply).

For the current Hong Kong stock market, the overall pressure on the market has not improved, and the momentum of stock capital entering the market is insufficient.

In contrast with historical cases, it should be noted that "Shenzhen Hong Kong" news may lead to changes in market tempo, thereby attracting stock funds to accelerate the market.