Economy, liquidity, inflation a-share will be "triple door"

Beijing Round Table needs economic confirmation Moderator: a strong rebound this year has spurred investor confidence in the macroeconomic recovery. But as the index climbed to 2,700, there was a concern in the market whether the strong trend in the stock market had deviated from the current macroeconomic process. 　　Can China's stock market break out of its own independent market in the context of economic adjustment? Frank Gong: First of all, the international situation is stabilizing, the systemic risk is greatly reduced, and the international economy and markets are showing initial signs of recovery and stabilization. If the international economy and markets are only signs of initial stabilisation, China's recovery is accelerating. 　　China has fled far from the bottom. Chinese consumers are doing much better than expected, the most valuable part of China's economy. In China's most difficult first quarter of the economy, China's consumers to buy a lot of homes, cars, more than the market expectations of many people, but also the main driver of the stock market rally: Consumption + investment caused by revaluation of market valuations is the driving force of the market. 　　We have always believed that H-shares, including a-shares, are in the early stages of a bull market and are now rising higher, and that valuations are back to normal levels of history. Chen Hong: The most important issue in the current market is that the current rally has not only reflected the current economic recovery, but also implied higher expectations. 　　What is uncertain now is whether the economy will be able to confirm the higher expectations of the stock market in the next three months, thus driving the market to strength. On a personal level, there is some concern about the current "recovery effect" of the stock market, as the expected macroeconomic recovery curve is somewhat steep, worrying about the sustainability. The risk is gathering, the real economy's demand actually does not have the capital market to embody so radical, once appears the trouble, will cause the big change. At present, the market is still in the "positive cycle", that is, the real economic recovery to promote stock prices, market liquidity increased, investor risk appetite is improving, everyone is pursuing the allocation of assets. 　　But beware, if the situation is not as good as we think, the "positive cycle" becomes a "negative cycle" faster. Dong Hongbo: This departure is normal, the most important reason is that the macro-economy is only a factor affecting the market, not the only factor, and in terms of macroeconomic status and future expectations, I personally believe that the latter has a greater impact on the market. 　　The market trend each year each has the different influence factor, June and even the future market trend judgment still depends on the overseas market, the investor anticipation as well as the government policy and so on factor change direction. Whether liquidity will slip away host: The staggering number of Chinese credit in the first quarter is also seen as an important reason for the surge in the stock market. But in the two quarter, we saw a reduction in credit growth, and that reduction could continue in the second half. 　　In this respect, the market also has a concern, whether the liquidity began to shrink, this will affect the stock market? Frank Gong: The recent global financial situation has stabilized and the globalGold account accumulated cash has 6 trillion or 7 trillion U.S. dollars, generally up to 2 trillion or 3 trillion U.S. dollars. Now this part of the money into risky assets, because people think the global economy is beginning to recover, willing to take more risks. So money is streaming out of cash accounts. In the process of low stock market innovation, the dollar has become a refuge, and the money has recently flowed from the sanctuary to risky assets. So the dollar will continue to weaken in the short term. 　　Resource stocks will strengthen. In recent times, we have seen that China's a-share is not leading the world. Most recently, India, Brazil and Russia have gone crazy, rising 50% in the last two months. Their return this year has far surpassed the shares. So, a shares are now lagging behind, is not the world's best performance of the stock market. But at least the economic data in China are getting better. Other countries are still poor, so they are relatively willing to put their money into China, which I think is the safest in emerging markets. 　　China's fundamentals will not be lower than expected, at least to reach expectations or better than expected. Chen Hong: From an incremental perspective, bank credit will gradually decline, this is basically a consensus. The first quarter of the special case of the credit blowout will not repeat in the second half of the year, and from the breakdown of the annual credit indicators, the second half of the share is not much, the increase in the speed of credit growth is basically a foregone conclusion. However, this does not mean that the government is shrinking liquidity, which is just a normal restructuring of the credit structure. 　　For the sake of national confidence and the need for real economic recovery, the government's stimulus will not be immediately weakened, which means that, although the policy facing the stock market will gradually reduce the positive, but this will not affect the normal operation of the stock market too much impact. In my opinion, as long as the macro-economy is indeed on the track of recovery, everything is not a problem, liquidity is only a variable, should be placed in the second place. 　　What needs to be looked at now is an external recovery, and there is no need for unnecessary concern about liquidity if both internal and external needs are to return to normal in the future. Dong Hongbo: First, the two-quarter capital Crunch, which I think is not necessarily the result of central bank cutbacks, is more meaningful and sustainable for the real economy than normal size. 　　At present, liquidity is not lacking, the key is the extent of the real economic recovery and investors ' expectations, I personally think, should continue to observe. The pros and cons of inflation expectations host: In the recent a-share market, the resources sector has been unusually strong, which implies investor concern for future inflation expectations. Last year, we were worried about high inflation, which is one of the big reasons for the stock market's rapid decline. And today, how should we look at the impact of this inflationary expectation? 　　In this case, which sectors should investors focus on? Frank Gong: In the current global inflation situation, inflation expectations are the biggest positive for the stock market. Now the world's central bank wants to prevent deflation, preferring to risk inflation rather than risking deflation. In the case of inflation, real estate is the best asset against inflation to buy tangible assets. There are inflationary expectations that the antiand conducive to consumption and investment, conducive to the economy. But if there is real inflation in the future, it will not necessarily benefit the economy and the stock market. At that time, central banks may have to change their policies and start tightening. 　　But the general tightening itself is not necessarily not conducive to the stock market, because of the situation, generally in the economic expansion is very strong in the case began to do, see the strength of economic expansion and the strength of austerity compared to which is stronger. I think the future inflation risk will be higher than the risk of deflation, we still advocate the real estate, the main push some commodity resources, that is the best inflation-proof tool. 　　In this case, when real inflation comes in the future, what you are fighting against inflation, only tangible assets can resist inflation. Chen Hong: For inflation, the current expectation is that by the end of the year, CPI will return to normal and even higher levels, hoping that the economy will return to a normal level. But I think too high inflation is unlikely to happen, and high inflation is not only bad for the economic recovery, but also has other negative effects. Therefore, I will not use high inflation as a prospective assumption of future investment. 　　From the market point of view, once the inflation is really up, is not a good thing for the stock market, last year is a clear example. We cannot make a clear judgment on the future market trend. But we have a basic assumption that the market as a whole will be unbalanced, but the volatility will increase. Under this assumption, the specific configuration is decided. Based on the inflationary logic and the current state of being in a positive cycle, we will opt for those sectors where valuations are attractive, such as banks. Because we observed that some of the bank spreads narrowed in the first quarter, and that all the banks ' spreads in the two quarter would be bottoming out. 　　To be honest, if the banking sector is excluded, the A-share market is already quite high, at a time when it is reassuring that these banks are assets. Dong Hongbo: Global liquidity is now in the process of release, in terms of inflation, the monetary conditions appear to be gradually formed, but whether the formation of inflation to observe the recovery of the economy itself, and the government's future changes in the liquidity policy is also noteworthy. 　　I personally think that, from the present point of view, there is only inflationary expectations, but there is no threat of inflation. A rally of more than 1000 points has been boiling and investor enthusiasm has gone up. But behind the fire, we cannot ignore the hidden worries: Can the economic recovery really reach its expectations? How long can loose mobility last? How to cope with rising inflation expectations? These issues will directly determine the future trend of a-share market.　　This round table invites JPMorgan Chase's Greater China chief economist Frank Gong, who has been bringing optimism recently, 15 experienced a pair of "eyes" in this year to lead the team to create outstanding results of Haitong deputy general manager and investment director Chen Hong, as well as on the Morgan Small Disk Fund fund manager Dong Hongbo, jointly explore this issue of hot topics. Guest: Frank Gong, chief economist of Greater China, JP, vice president and investment director of Haitong Fund management company Chen Hong (left)Morgan Small Disk fund manager Dong Hongbo (right) Moderator: China Securities news reporter Li Liang Athena chu map/Wang Li