MARKET BUZZ: RMB Appreciation Supports China Equities Sentiment – CS

  By Hong Kong Newsroom
Nikkei Markets
  HONG KONG (Sep 14) — Credit Suisse says RMB strength supports uptrend in China equities market, but sees limited earnings impact. “Since August 2015 (RMB reform), stock markets have generally moved in tandem with the RMB exchange rate,” it says in note. House says with exception of the period between May 2016 and October 2016, both MSCI China and CSI 300 have moved in line with currency, i.e. market goes down when RMB depreciates and vice versa. “The stock market probably will be “stronger-for-longer” under a strengthening RMB environment, though this is really not a deciding factor.” Says macroeconomic cycle still remains the dominant factor. From sector perspective, CS says strengthening RMB will be beneficial to sectors like airlines, downstream oil and property developers, and those with lots of foreign debt. CNY climbed to its strongest level in 14-month last week of 6.44 against dollar. USD/CNY now at 6.5454, down 3.5% since June-end.
  – By Hong Kong Newsroom;; +852 3960 5102
– Edited by Nimesh Vora
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