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Financial Index Weekly Report 2018/11/05

Fang submitted 2018-11-05 23:46:11

Market Summary:

Last week, there was generally increase over the market. SSE Composite Index (000001.SH) changed 2.99 % to 2676.48.

As for the overall market valuations, they remain at low level in a longer historical view.

Credit spread between A-rate corporate bonds and treasury bond almost unchanged. As for the spread between Shibor Rates and Treasury bonds yield, all

terms (1M,6M, IY) of them experienced some fluctuations and now hold a flat structure. As for treasury bond yield, there was a slightly increase for short term yield. The interest rates are still at relatively low level.

As for exchange rate, there were appreciation for both inland and offshore rates, that CNY/USD decreased 0.84% (up to 16:30 of last Friday) and CNH/USD increased 0.76%.

As for foreign fund flows via both Shanghai and Shenzhen-Hong Kong Stock Connect, last week there were both net inflows for Shanghai and Shenzhen markets. The net inflow over last week was 34.63 billion CNY and the cumulative net inflow was 604.55 billion CNY at last Friday and creates another historical new high. Specifically, more inflow in Shanghai market than Shenzhen market.

In sum, last week, the market significantly rebound. Specifically, president Trump made a phone call to president Xi on Nov. 11, which boost the market confidence about the trade prospect and lead to a dramatic rebound of RMB exchange rate.


News:

Huang Qifan, vice-chairman of the 12th National People's Congress Finance and Economics Committee, said that high tax and fee costs, high logistics costs, high financial financing costs, high land and real estate costs and high labor costs are the "five high" of current business costs. To reduce business costs, the government needs to change its thinking and improve management.

According to the front-page article of the Economic Reference Newspaper, China's financial institutions should raise awareness, carefully study and judge the characteristics of risks in the operation of private economy, take positive actions and take various measures simultaneously to effectively improve the quality, efficiency and strength of financial services for private economy. China's financial institutions should attach great importance to the financial problems faced by private enterprises, actively adjust business strategies, and vigorously support the high-quality transformation and development of private economy.

The People's Bank of China issued the China Financial Stability Report (2018), in which a special topic was set up to discuss the establishment of a financial holding company supervision system to guard against the brutal growth risk of financial control groups. At present, the regulatory measures are in line with the reporting procedures and strive to be launched in the first half of next year.

Securities dealer China: The first risk product "National Life Assets - Phoenix Series Products" to relieve the stock pledge of listed companies, with a total target of 20 billion yuan, will be issued in stages.

Zhou Xiaochuan: China's savings rate reached about 50% at its peak and has dropped by several percentage points. The trend of possible decline is still quite fast. Of course, the decline has certain advantages, indicating that our domestic demand has increased.


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