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PBoC Governor Yi Gang’s latest statement on China’s economy and trade war! Prepare for the worst case scenario

The release of 1.2 trillion RMB reserve requirement ratio funds is about to occur in the second half of the month, and the capital fabric will first loosen and then tighten

Market Comments

Market Comments: Risk prevention measures were introduced continuously over the weekend, and short-term market risks are expected to be alleviated.

Macro perspective: 50 private listed companies announced that they have received state-owned capital investment

Real estate: From January to September, the total financing of 85 typical real estate companies was 828.7 billion yuan, a year-on-year decrease of 11%.

Futures Information

Metal Energy: Gold 273.95, up 0.61%; Copper 50720, up 0.46%; Rebar 4112, up 0.66%; Rubber 12325, up 0.57%; PVC Index 6725, down 0.52%; Zheng Chun 3502, up 1.74%; Shanghai Aluminum 14280, up 0.18%; Shanghai Nickel 104950, up 0.23%; Iron Ore 514, up 0.10%; Coke 2529, up 1.67%; Coking Coal 1368, down 0.07 %; crude oil 568, down 0.42%;

Agricultural products: soybean oil 5930, up 0.61%; corn 1913, up 0.47%; palm oil 4818, up 1.13%; cotton 15600, up 1.07%; Zhengmai 2553 , down 0.00%; Sugar 5144, up 0.92%; Apple 11753, down 0.14%;

Exchange rate: EUR/USD 1.1557, down 0.31%; USD/RMB 6.8197, up 0.64%; USD/HKD 7.8333 , down 0.01%.

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1. Central Bank Governor Yi Gang’s latest statement on China’s economy and trade war! Prepare for the worst case scenario

On October 12-14, Central Bank Governor Yi Gang attended the 38th International Monetary and Financial Committee (IMFC) meeting and spoke at the 2018 G30 International Banking Seminar Will speak.

1. Regarding the Chinese economy: China’s current economic growth is stable and it can achieve an economic growth rate of 6.5% this year, or it may be slightly higher.

2. Regarding Sino-US trade friction: The Sino-US trade balance should not ignore three factors. The trade war will lead to a lose-lose situation. China sincerely hopes to find a constructive solution to the Sino-US trade friction issue. , but also prepare for the worst-case scenario.

3. Regarding China’s monetary policy: The current monetary policy is neither relaxing nor tightening. There is still considerable room for monetary policy tools, including interest rates, reserve ratios and monetary conditions. Considering that the Federal Reserve is raising interest rates, China's interest rate level is appropriate.

Comments: Governor Yi Gang’s speech shows that China has sufficient monetary policy space and the ability to cope with the worst-case scenario. This is expected to stabilize investors’ expectations, ease market panic, and reduce market bias. Profit.

(Investment consultant?Cai Jin?Registered investment consultant certificate number: S0260611090020)

2. The 1.2 trillion reserve requirement ratio reduction fund is about to be released in the second half of the month. The capital material will first loosen and then tighten

On Monday (October 15), the latest targeted reserve requirement ratio cut will be officially implemented, which is expected to release more than one trillion yuan in funds. Industry insiders believe that under the combined effect of various factors such as the implementation of RRR cuts, government bond issuance and corporate quarterly tax payments, the capital structure will first loosen and then converge in the second half of October. This week will be the month The period when funds are the loosest.

Comments: Judging from the financial situation, the financial situation will first loosen and then tighten in the second half of this month. This week will be the loosest period of this month; combined with the trend of the recent stage, , the loose capital situation this week is expected to support the market rebound, but if the capital side turns tight later this month, the height of the market rebound will not be very high, and it is not recommended to rush for a rebound with heavy positions.

(Investment consultant? Cai Jin? Registered investment consultant certificate number: S0260611090020)

Market comments

1. Market comments: Risk prevention measures were introduced continuously over the weekend. Short-term market risks are expected to ease. The Shanghai and Shenzhen stock markets opened slightly lower on Friday. The three major indexes hit new lows during the session, and individual stocks continued to show panic selling. Subsequently, heavyweight sectors such as banks gradually emerged, supporting the three major indexes to turn red one after another. The Shanghai Stock Exchange Index returned to 2,600 points, and the Shanghai Composite 50 rose by more than 2%. As of the close, the Shanghai Composite Index rose 0.91%, the Shenzhen Component Index rose 0.45%; the Chuang Index rose 0.52%. From a disk perspective, the oil, steel, banking, cement, coal and other sectors were among the top gainers, while the plantation and forestry, environmental protection, gas and water services sectors were among the top losers. In the short term, the market's initial stabilization and rebound are mainly due to the convergence of continuous panic in the market itself. The first counterattack of heavyweight stocks on the market reflects signs of active intervention of funds, which is generally regarded by the market as a policy directive. On the news over the weekend, Shenzhen introduced a tens of billions of policies to support listed companies in resolving liquidity crises, which aroused great public attention and helped alleviate market concerns about the current land mines of equity pledges of small and medium-sized private companies.

We believe that the short-term market has reached the bottom line of policy-level "preservation of no financial risks". Recently, whether it is for medium- and long-term issues such as tax cuts and social security, or short-term issues such as financing and leverage, they have accelerated reforms or increased their support. Whether specific measures can be implemented quickly in the follow-up is the core factor that determines whether the market's mid- to long-term sentiment can be restored. In terms of operation, it is recommended that investors mainly hold stocks. After the market crash, most of the risks have been released. At this time, confidence is more important than gold. On Friday, China's manufacturing sectors such as new energy vehicles and 5G saw significant capital inflows. Investors can pay attention to the oversold rebound opportunities of high-quality white horse stocks on dips.

(Investment consultant Zeng Zilei, registered investment consultant certificate number: S0260613090015)

2. Macroscopic perspective: 50 private listed companies announced that they have received state-owned capital investment. Statistics from Brokerage China show that 50 privately-owned listed companies have announced that they have received state-owned capital investment. Since September alone, 18 companies have disclosed the intention of major shareholders to transfer equity to state-owned assets.

Investment Consultant Comments: Affected by the plunge in the external market last week, A-shares fell sharply, and many small-cap stocks fell sharply and lost liquidity. The willingness of short-term state-owned capital to take over will help alleviate the liquidity pressure on small-cap stocks. Small-cap stocks have experienced multiple consecutive surges in the past two years, and some targets have shown significant investment value. This news will also help stabilize investors' confidence in small- and medium-cap stocks.

(Investment consultant Zeng Zilei, registered investment consultant certificate number: S0260613090015)

3. Real estate: From January to September, the total financing of 85 typical real estate companies was 828.7 billion yuan, a year-on-year decrease of 11%. CRIC Real Estate research data shows that the total financing amount of 85 typical real estate companies from January to September was 828.7 billion yuan, a year-on-year decrease of 11%; 43% of real estate companies had a year-on-year decrease in financing amount; the overall financing cost rebounded to 6.91% in September. reached the highest value since the second half of last year.

Investment Consultant Comments: Since the beginning of this year, real estate financing has been significantly tightened, and real estate has entered a cold winter. The slogan of "survive" was also shouted at the Vanke Conference. The reduction in financing amount and the rebound in financing costs are fatal blows to real estate companies. In the future, small and medium-sized real estate companies will be under greater pressure, and most of them will not be able to escape the fate of being eliminated or merged. For large real estate companies, there will also be a significant impact in the short term, and it is expected that the profits of real estate companies will be significantly affected next year. However, in the medium to long term, the industry adjustment period will be conducive to the consolidation and expansion of leading real estate companies. After the short-term market oversold, investors can pay appropriate attention to the rebound opportunities of leading real estate companies.

(Investment consultant Zeng Zilei registered investment consultant certificate number: S0260613090015)