Will RMB Join SDR And A Share Will Implicate Each Other?

In the case of RMB accession to SDR, the A share market will accelerate the pace of opening to the outside world, which is conducive to the development of A share market in the long run. But the premise is that the A share market must bid farewell to the money market. The valuation of the A share market should be returned to a reasonable level. The supervision of the A share market must be strict, and there must be a strict law to convoy. At the same time, the legitimate rights and interests of investors must be protected, especially the class action system must be introduced into the A share market.

Only in this way, the A share market will develop into a market with attractive investment, which will lead to the inflow of global capital. The positive significance of China's stock market will be reflected in the accession of RMB to SDR. There is no suspense, Beijing time on December 1st at 1 o'clock in the morning, the RMB accession to SDR matters settled. The International Monetary Fund announced that it will formally RMB The basket will be included in the SDR basket, and the resolution will take effect in October 1, 2016. RMB has historically become the first emerging market currency to be incorporated into SDR.

Although it is expected, it is a milestone for the RMB to join the SDR. It represents the worldwide recognition of China's reform process and a major step in the internationalization of RMB. It has a positive impact on enhancing the attractiveness of RMB assets, and enabling Chinese enterprises and products to go global. It also helps to enhance domestic and foreign investors' confidence in the Chinese market.

However, for investors in the A share market, perhaps the most important concern is the impact of RMB joining the SDR on the A share market. Even on the eve of the RMB's accession to the SDR, some media also deliberately took the "Japanese yen's accession to SDR after Japan's shares rose 7 times". It said that after the Japanese yen entered the basket of SDR currencies in 1973, the Japanese stock market rose from 5000 points to 29 points in December 1989 and hit a record high of 38597 points. As a result, A share investors will inevitably expect to see the A share market after China's accession to the SDR, expecting that the "miracle" of the Japanese stock market can also be staged in A shares.

It should be said that in the media, it is not proper to take the Japanese yen up to 7 times after joining the SDR. After all, the 7 fold rise in the Japanese stock market has lasted for 17 years, and the fundamentals of the Japanese stock market have changed over the past 17 years. It is unconvincing to attribute the 17 years of Japan's stock market growth to Japan's accession to the SDR. After all, the Japanese stock market also has ups and downs in the past 17 years, not to mention the subsequent Japanese stock market has gone through the painful process of the stock market bubble burst. Is it true that the Japanese stock market crash is also caused by the Japanese yen's accession to the SDR? Therefore, it is not practical to attribute the Japanese stock market's rise to the Japanese yen's accession to the SDR. Investors in China's stock market should not expect Japan's stock market to be staged in China.

In fact, Japan equity market The story of "7 times higher" is not likely to be put on in the Chinese stock market. Although RMB accession to SDR is a major event, its impact on the A share market is relatively limited. As the industry concerned has analyzed, SDR is essentially a bookkeeping unit, which can not be directly used for payment and settlement of international trade, nor can it be converted into gold. Therefore, after the accession to SDR, the demand for RMB is limited.

In fact, in practical operation, SDR The total volume of actual transactions is also low and the application scope is limited. Therefore, joining the SDR will not directly increase the demand for RMB in the international market. Especially when China's internal economic growth is weak and the external diversion is strong, it is expected that no capital will flow into the domestic capital market after China's accession to the SDR. Moreover, after the RMB has joined the SDR, the RMB is even facing the pressure of stage devaluation. Therefore, it is not possible to exclude the possibility that hot money will flow out of the Chinese market.

It is especially important that after the RMB has joined the SDR, the RMB can be exchanged under capital account, which makes it easier for domestic investors to invest in overseas markets. Especially in Shanghai and Hong Kong, institutional investors will be allowed to trade Hongkong stocks without limitation. This is obviously unfavorable for the A share market, which is significantly higher than the Hong Kong stock market.

Because of this, the RMB's accession to the SDR will not lead to a large influx of overseas capital. On the contrary, there may be funds diverting the domestic market. Therefore, the RMB's accession to the SDR will have a positive impact on individual stocks in some industries, such as RMB cross-border clearing bank, international business and logistics company, and the corresponding stocks such as Bank of China, Zhongda, Ruyi group, Sifang Jing Chuang, Huijin shares, and Bailong East have limited influence on the stock market. The overall trend of the A share market is ultimately determined by its internal factors.