Is The Hong Kong Stock That Has Surged Worth Investing?

What are the changes in the keynote of the central bank's monetary policy? What are the areas of China's "deleveraging" this year? Why are there only structural opportunities in the A stock market? Are the Hong Kong stocks that have already surged worth investing? In view of the above problems, Li Lei, chief economist of China and Thailand securities, has accepted an exclusive dialogue on Wall Street. He pointed out that the proportion of China's financial industry added value to GDP is relatively high, and that monetary policy easing from loose to neutral is a rational decision to guard against financial risks.

For this year

Li Xunlei thought that the growth of the middle reaches industry at the beginning of this year was faster and the inflation was rising. Therefore, it is logical to tighten the money slightly.

Whether we will relax in the second half of the year will mainly depend on the economic situation. If the investment growth rate falls faster, we will not rule out the possibility of relaxation.

He also mentioned that the household stock allocation rate is relatively low, but domestic stock prices are not cheap at present. With the opening of Shanghai and Hong Kong and Shenzhen and Hong Kong, domestic investors should increase the allocation ratio of Hong Kong stocks, which has the advantage of low valuation and high dividend yield.

Loose and loose performance is in many ways, including the credit growth rate remains at around 12%, the scale of the whole social financing is still large, and the interest rate level is relatively low. Therefore, in general, our currency is still loose.

Now, to return to neutral, the main pressure lies in the difficulty of China's economic restructuring, such as a high dependence on investment. Last year, domestic fixed asset investment accounted for 80% of GDP, while the proportion of most countries in the world was only about 20%.

Although the scale of investment is huge, it leads to excessive currency. However, a large part of the excess money is stuck in the financial sector, which leads to the economic reality.

For example, the value added of China's financial industry is higher than that of GDP, China is 8.3%, the United States is 7.2%, and Japan is only 5%.

The United States and Japan are developed economies, their currencies are international currencies, and our yuan is far from being internationalized, so the excessive financial boom is a manifestation of the distortion of the economic structure.

Therefore, it is a rational decision to prevent monetary policy from loosely returning to neutrality.

It depends on the operation of the Chinese economy.

If monetary policy is too tight, the interest rate will go up, which may lead to the breakup of capital chain and bubble, and ultimately trigger systemic financial risks.

The outbreak of the financial crisis in many countries is caused by the upward interest rate. China should avoid such a situation.

Therefore, to return to neutrality is to make people understand that money will not be too tight.

Over the past two years, monetary policy has shown signs of loosening and tightening in the implementation process. This may be required for steady growth. At the beginning of this year, the industry of the middle reaches grew faster and the inflation rose. Therefore, it is logical to tighten the money slightly.

As for the relaxation of the second half of the year, we will mainly look at the economic situation. If the investment growth rate falls faster, we will not rule out the possibility of relaxation.

"Deleveraging" will continue to advance, which is complementary to capacity and inventory.

For overcapacity industries, it must be leveraged, which can not be simply understood as the financial sector.

This also includes residents' deleveraging, which means that the growth of mortgage loans is too fast.

I think the scale of mortgage loans this year will be slightly lower than last year, because mortgage policy is expected to tighten, and middle income residents can not afford the pressure of interest rate caused by excessive leverage.

In addition, enterprise deleveraging is also an urgent task, especially in state-owned enterprises, to clean up a number of zombie enterprises, but also to reduce debt ratio through mixed ownership reform, debt to equity swap and so on.

All in all, this year is the year of deepening reform. The relevant measures should follow the five major objectives of the structural reform of supply side: capacity, inventory, leverage, compensation and cost reduction.

CPI is expected to go up this year, but it should not exceed 3%. The main reason is that there is no fundamental change in the pattern of overcapacity in the middle and lower reaches.

Before 2000, inflation in China was related to insufficient capacity. At present, most commodities are oversupplied, so there is no shortage of supply in total, and there are exceptions in individual industries.

The study found that the rise in labor costs in the past five or six years is still very obvious, resulting in the rise in service prices in CPI, but the price of consumer goods is almost flat. This means that the rise of CPI is mainly driven by human costs.

Similarly, the price of living goods in PPI does not rise much, indicating that the downstream overcapacity is very obvious, even though the price of products in the middle reaches is rising.

And the price increase in the middle reaches is caused by infrastructure investment and real estate fever, and the middle reaches itself has already pressed capacity.

Whether the price of the downstream increases or not is related to the increase of residents' consumption power.

He is a populist. He wants Americans to get more benefits, not to assume global responsibility. His trade protectionism is very obvious. Therefore, this year's exports are very uncertain.

In 2016, the global share of China's exports has declined, which is relatively rare.

Over the past few years, although China's exports are negative growth, the proportion of global exports has been rising, while the 2016 figures show that the share of China's exports has declined, and it is not optimistic in the future.

In fact, a large part of China's export advantage in the past has been raised by low labor costs and labor productivity. If manpower costs remain high, productivity growth will decline and export advantage will be smaller and smaller.

As for trade wars, Trump has not yet moved on to China, and the Chinese government is definitely preparing for it.

For example, China's import volume to the United States increased sharply in January this year, and Trump's complaints about China may be reduced correspondingly.

However, a fact that cannot be avoided is that China's trade surplus with the United States accounts for nearly 50% of the US deficit, while Mexico, Japan and Germany account for only about 10-15%.

Therefore, Trump's trade strike measures against China are sooner or later.

More complementarity, China imports high quality products from the United States, and the United States imports ordinary consumer goods from China. The two countries are not competitive trade relations.

If Trump adopts trade protection measures against China, China will also implement corresponding countermeasures.

For the entire capital market, the upward pressure on interest rates still exists, bonds are most sensitive to interest rates, so they can not allocate too much bonds, and the proportion of real estate in the allocation of household assets is too high, so it is not appropriate to allocate too much. The household stock allocation rate is relatively low, but domestic stock prices are not cheap at present. With the opening of Shanghai and Hong Kong and Shenzhen and Hong Kong, domestic investors should increase the allocation ratio of Hong Kong stocks, which has the advantage of low valuation and high dividend yield.

At present, the style switching of A shares is still around the hot spots, such as building materials, cement, steel and non-ferrous metals in the cyclical plate, which are at the outbreak stage of the growth of performance.

In addition, there are more discount shares in H-share, and the valuation advantage of Hong Kong stock is quite obvious. It belongs to one of the lowest valuation markets in the world, and the dividend return rate is relatively high.

Domestic investors are expected to increase their share of Hong Kong stock allocation due to the devaluation of the renminbi.

The core point of the "steady progress" is to avoid the economic boom and fall, and only if it is stable, the reform can be promoted.

The intention of "moving forward steadily" is reform, but the premise of reform must be stable. If the market is unstable, various risks will happen. The hard landing of the economy is not what we would like to see.

Since 2011, General Secretary Xi began to say "steady progress". My understanding is that the problem of high leverage and bubble is not yet solved.

Based on this point of view, it is estimated that asset prices will not be up and down this year. This is also the responsibility of the local governments and ministries.

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