With the sudden change of international geopolitical situation, more and more foreign capital continue to increase their positions in RMB assets. Since February, the overall trend of RMB exchange rate has been strong. On February 24, the onshore RMB exchange rate once rose to 6.310 yuan, hitting a new high in recent four years.
Analysts generally believe that the current foreign exchange market is dominated by risk aversion, the “safe haven” attribute of RMB assets is prominent, and the RMB exchange rate may remain relatively strong throughout the year.
two factors promote the RMB exchange rate to remain strong
For the strong performance of the RMB exchange rate since February, Ping An Securities said that two factors have prompted the RMB exchange rate to remain strong: on the one hand, the tightening expectation of the Federal Reserve is rising this year, but the US dollar has not appreciated significantly. The performance of emerging market stocks in 2022 is better than that of US stocks, which shows that the impact of the spillover effect of the Federal Reserve’s interest rate hike on emerging markets is declining. On the other hand, the root cause of the divergence of monetary policies between China and the United States lies in the differentiation of economic cycles. At present, the United States has accelerated to increase interest rates under the pressure of inflation, but the increase of interest rates will damage the prospects of economic growth in the United States, and the PMI of manufacturing industry in the United States has declined for two consecutive months; With the support of loose policies, China’s economy is stopping its decline and stabilizing, and the PMI index has stabilized near the 50 boom and bust line. This means that in the future, China’s economic cycle may be upward, while the U.S. economic cycle may be downward, which is why there is no capital outflow in China against the background of the rapid narrowing of the interest rate gap between China and the United States. Since February 14, the strong offshore RMB exchange rate also shows that overseas capital is still optimistic about Chinese assets, and China’s securities market is still expected to usher in continuous capital inflows in 2022.
The conflict between Russia and Ukraine has little negative impact on the future trend of the people’s exchange rate. China International Capital Corporation Limited(601995) said that if Russia Ukraine relations continue to be tense, the RMB may be affected by two factors: on the one hand, China is an energy importer and has closer economic and trade exchanges with Russia; On the other hand, Russia may diversify the allocation of foreign reserves and increase its holdings of RMB assets after sanctions. In contrast, factors such as the increase of energy import costs may have a negative impact on the RMB exchange rate in the short term. On the whole, the intensification of the conflict has a negative impact on the RMB exchange rate. However, considering the large size of China’s economy and the small proportion of economic and trade with Russia, the RMB exchange rate may be less sensitive to this event than other Asian currencies.
RMB exchange rate strengthening is good for A-share import enterprises
With regard to the impact on A-share related companies under the background of RMB strength, pan Helin, executive director of the Digital Economy Research Institute of Central South University of economics and law, told the Securities Daily that the strengthening of RMB is mainly beneficial to RMB denominated assets, such as real estate and other RMB denominated resources, as well as some manufacturing enterprises that need to be imported, They can buy overseas products at a relatively low price, so as to obtain exchange rate gains, which is generally conducive to imports, but has a certain impact on exports. In terms of a shares, imported enterprises, such as cross-border e-commerce, duty-free stores and so on, benefit more. However, the epidemic and insufficient demand still exist. On the whole, the impact of the current RMB appreciation on relevant stocks should not be too strong.
\u3000\u3000 “Although the nominal interest rate in the United States has strengthened in the past few months, considering the high inflation in the United States and the weak real interest rate in the United States relative to China, this has laid the foundation for the strengthening of the RMB against the US dollar. The strengthening of the RMB exchange rate is good for aviation, paper and real estate. However, aviation stocks depend more on the epidemic, so we can see that paper and real estate perform more significantly in the stock price. The inflection point of US dollar depreciation in the future depends on the progress of interest rate increase and inflation. If the conflict between Russia and Ukraine does not significantly exacerbate global inflation, it is preliminarily predicted that the upward pace of US inflation will slow down after April, and the RMB may weaken against the US dollar at that time. ” Zhao Yuanyuan, investment director of Jianhong times, said in an interview with the reporter of Securities Daily.
He Jinlong, general manager of Meili investment, said that the geopolitical risks caused by the recent conflict between Russia and Ukraine have certain short-term disturbing factors, while the direct impact is relatively limited in the long run. On the one hand, the strength of RMB is based on the increase of net foreign exchange inflow driven by China’s trade surplus, and supply exceeds demand. Moreover, China’s low inflation also highlights that RMB assets have a strong risk aversion attribute and are more attractive to foreign capital. At present, A-Shares are in the stage of undervaluation relative to the peripheral market, and the risk of capital outflow in China’s securities market is not high. Investors should pay attention to the balanced allocation of bottom-up structural opportunities under the background of A-share correction opportunities and stable growth policies.
three major track investment opportunities are promising
Further combing the mainstream views of institutions, it is found that the investment opportunities of cross-border e-commerce, airports and papermaking sectors have attracted much attention in the context of RMB appreciation.
Since February, the cross-border e-commerce sector has risen by 1.97% and more than 60% of the stocks in the sector have risen. Regarding the investment opportunities in the future of cross-border e-commerce sector, China International Capital Corporation Limited(601995) said that in the short term, the epidemic overdraft overseas consumer demand for durable goods, and the short-term growth rate will fall; Amazon Title Event regulates cross-border e-commerce sellers, and independent stations will grow rapidly; European tax reform and high freight rates will cause short-term operating pressure on cross-border e-commerce. In the long run, the epidemic has accelerated the formation of online shopping habits, and there is still room for cross-border e-commerce to penetrate; Diversify the platform pattern and broaden the channels for brands to go to sea; Improve logistics efficiency and open restrictions on cross-border e-commodities. Compared with traditional trade, the value of Chinese brands has nearly 8% room for improvement in the cross-border e-commerce value chain, and their competitiveness is expected to be enhanced.
Affected by the epidemic, there has been a correction in the airport sector since February, with a cumulative decline of 0.59%. For investment opportunities in subsequent cities, Everbright Securities Company Limited(601788) said that with the continuous promotion of covid-19 vaccine and treatment technology, the demand for air passenger transport will gradually recover. The revaluation of relevant companies is a deterministic event, and the short-term fluctuation of stock price does not change the upward trend of the airport sector.
Since February, the performance of the paper sector has been particularly outstanding, with a cumulative increase of 6.3% during the period, significantly outperforming the Shanghai Composite Index in the same period (up 2.68%). For the paper sector, Orient Securities Company Limited(600958) said that since mid April 2021, the price of cultural paper under the impact of imports has fallen rapidly from the previous high point. In the second half of 2021, due to the weak overseas demand and the suppression of imports at the supply side, The poor supply and demand leads to the failure of smooth transmission of cost pressure, and the price and profit are relatively low. In the near future, due to the improvement of the margin of supply and demand, the promotion of cost rise and other factors, the price increase is expected to be implemented. Considering the low attention of the market to the sector in the early stage and the long adjustment time of leading targets, the superposition of fundamental improvement and valuation can be expected to repair the market.
