Economy strong, weak stock market, the first half of the real economy and stock market divergence Xiangcai vice president, Lee Kang-director of the Institute that the market is too concerned about the shortcomings of the Chinese economy, and these negative expectations in the second half is expected to improve. He said the market should not worry about moderate inflation and deflation may be expected in the second half will be on the rise, investment will remain the main force driving economic growth, “two high and two low” will be a market for investment. We are more optimistic about the Chinese economy as a whole, the basic judge is in the second half of “one two no” – only the expected steady growth, not inflation expectations, and no rate hike expectations. Annual economic growth rate projected at 10.1%, of which 25% of investment growth, pulling GDP4.2 percentage points; consumption growth of 22% -25%, pulling GDP5.2 percentage points; export growth of about 20%, the contribution rate of 0.7% on the economy about. Make such judgments because, from the external environment, the global financial crisis is now over, the euro crisis is likely to end here, the world economy in the steady recovery in low. China’s economy there is no possibility of the second bottom, non-convertibility of capital account and foreign exchange strictly as flood control, to keep out other capital risk, making China’s economic growth rate may be unexpected. But the concern is that 10% of China’s economic growth, the level of 3% of the CPI, is a typical high-growth, low inflation, why is the world’s second decline in the stock market this year? Often a manifestation of the stock market is expected, but regardless of economic conditions, capital market will be negative interpretation. When China’s economic landscape, portrait all the good times, the market speculation inflation expectations, talk about interest rates and regulation, the government introduced control measures immediately; when the European economy fell slightly, imports decline, the market began to worry that China’s economy and exports of the affected . Now many economists have seen China’s shortcomings, but if we draw a table, the results on the left side of contradiction on the right side, left side of the options will obviously find much more than the right. So many investment opportunities in China. Such as inflation, when the CPI close to 3% when the market will be very tight. But the rational view of inflation, proposed in early management of their control at around 3%, not less than 3%, which means that even if the CPI above 3% the government could afford. Moreover, this year’s rapid economic growth, moderate inflation does not appear to be concerned about, stagflation is the case we need to beware. First of all, to see some bad in the second half of the market is expected to be improved, primarily for two reasons: first, the real estate existing measures are adequate macro-level will remain the observation period. Second, the April data, the downward trend in industrial added value, etc., which may lead to the rise of the market expectations of deflation, which is good news for the market. For example, some experts believe that in the second half is expected to cut deposit reserve rate, then the market will be reversed. In addition, if the deposit reserve rate reduction, the possibility that lower interest rates, together with the Ministry of Finance 5 trillion in new industry, new investment into Xinjiang and other large market is expected to inevitable change, that means the bottom of the market was proved. A share point is located at 3,000 points below the price of corporate acquisition price higher than the stock market, these are not normal. In addition, we often say that the stock market a long look at the basic, seen in the policy, a short look at technology, the trend of the stock market next year, certainly with the policies, especially the stock market management policies. 1-6 months of this year, China’s securities market financing amount is the amount of last year, and the Agricultural Bank of China to undertake such a large cap market. Is because in such a downturn still Neng finance to capital, hopes so do not fall to a certain extent there is the so-called “rescue Shi hand” Zhiyougushi Rong less capital when the capital market in China has Jiu Cai Hui City policy is introduced. At present, China is still a money supply of the stock market-style market, but market demand of funds. Everbright Bank coming soon, other banks have to follow up financing, these factors will affect future market upside. So in the second half of the market is likely to only be a certain point and in the context of “pull leather” return shock. As for the second half of the investment point, I think, “two high and two low.” “Two high” high-tech and regional economy, the Government needs only willing to release the hand of money to invest in the short term rapid growth, if the government investment, the two high performance of the business within a year or two will be revealed. “Two low” is the banking and real estate, the current valuation is low enough that the two plates, the market performance is often a surprise, as globally that year predicted that China’s banks to bankrupt, no one thought of the Chinese Industrial and Commercial Bank of China will become the world market largest enterprises.
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