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Northbound capital inflow accelerates, and the spring of A-shares may come?

Northbound capital inflow accelerates, and the spring of A-shares may come?

Northbound capital inflow accelerates, and the spring of A-shares may come?

The renminbi exchange rate has made a strong counteroffensive.

Since November, the RMB exchange rate has strengthened significantly: on November 20, the onshore and offshore RMB rose against the US dollar, both rising above the 7.17 mark, rising by more than 800 basis points and 500 basis points respectively during the day, both hitting new highs in three months.

Northbound capital inflow accelerates, and the spring of A-shares may come?

The analysis points out that the gradual signs of stabilization of the RMB exchange rate are the result of a combination of internal and external factors. Externally, as the Federal Reserve pauses interest rate hikes, the U.S. dollar index has fallen from its highs, easing the inversion of the interest rate differential between China and the United States.

Regarding the changes in the RMB exchange rate, Pan Gongsheng, governor of the People's Bank of China and director of the State Administration of Foreign Exchange, also said in an exclusive interview with a reporter from the Central Radio and Television General Station that there are many factors affecting the exchange rate:

Northbound capital inflow accelerates, and the spring of A-shares may come?

The first is economic fundamentals. This is the most fundamental factor. The mainland's economy has continued to pick up and improve, and there is a solid foundation for the basic stability of the renminbi exchange rate.

Northbound capital inflow accelerates, and the spring of A-shares may come?

The second is the international financial environment. The international market generally believes that the complete information of the Fed's current interest rate hike cycle is gradually digesting, and the interest rate differential between China and the United States will gradually converge to the normal range in the future.

Northbound capital inflow accelerates, and the spring of A-shares may come?

Finally, there is the investment value and attractiveness of RMB assets.

In the medium and long term, with the continuous activation of China's economic growth momentum and the further opening of the financial market, the investment attributes and hedging attributes of RMB assets have become prominent, and RMB assets have shown good investment value. Since the second half of August, the exchange rate of the renminbi against the US dollar has been basically stable, relatively strong against a basket of currencies, with an appreciation rate of more than 2%.

With the stabilization of the RMB exchange rate, the three major A-share indices have also risen collectively. The appreciation of the RMB exchange rate has two main impacts on A-shares:

Northbound capital inflow accelerates, and the spring of A-shares may come?

One is, from a fundamental point of view. The appreciation of the renminbi may affect the profitability of the company, such as import and export and foreign exchange gains and losses, and the resulting expected changes may be reflected in the company's stock price accordingly.

Northbound capital inflow accelerates, and the spring of A-shares may come?

Second, from the perspective of capital. The appreciation of the renminbi may attract accelerated foreign capital inflows, while boosting the market's risk appetite and improving liquidity in the equity market.

In addition to the appreciation of the renminbi exchange rate, the reform of the mainland's capital market is also constantly advancing. Since the introduction of the stamp duty reduction policy, the China Securities Regulatory Commission (CSRC) has accelerated the patching of the capital market system, including financing, shareholding reduction, IPO, refinancing and derivatives.

Northbound capital inflow accelerates, and the spring of A-shares may come?

In November, the China Securities Regulatory Commission (CSRC) solicited public opinions on the Measures for the Supervision and Administration of Derivatives Trading (Second Consultation Draft). It is mentioned that the regulatory rules will be improved and the behavior of using derivatives as a "channel" to evade the supervision of the securities and futures market will be severely cracked down. The China Securities Regulatory Commission (CSRC) has systematically sorted out this issue and uniformly regulated it in these Measures, including prohibiting the circumvention of the position limit system, the information disclosure system, and the shareholding reduction and restriction system through derivatives trading, prohibiting short-term trading, insider trading, and market manipulation through derivatives trading, and prohibiting derivatives operating institutions from carrying out derivatives transactions with the major shareholders, actual controllers, directors, supervisors, senior executives, and entities that reduce their holdings and restricted sales of listed companies.

Northbound capital inflow accelerates, and the spring of A-shares may come?

The regulators have shown a serious attitude towards market rules, which also provides investors with a more stable investment environment. If the regulator can continue to maintain a high-pressure posture on the market and continuously strengthen regulatory measures, it is believed that the market will become more standardized and transparent, and the interests of investors will be better protected.

Everything is ready, the year-end market of A-shares is coming?

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