CICC: More overseas funds and long-term capital entering the market are expected to boost A-shares from the funding side

Deep Tide TechFlow News, on January 5th, according to Jintou Data, China International Capital Corporation (CICC) pointed out that recently, driven by the rising expectations of Federal Reserve rate cuts and the peak of foreign exchange settlement at the end of the year domestically, the RMB against the US dollar has accelerated its appreciation. Under Trump’s “Great Reset,” US monetary policy combined with fiscal policy suggests that dollar liquidity will trend towards ample, and the US dollar is highly likely to be in a depreciation channel. In this scenario, the previously accumulated foreign exchange settlement motives may support the RMB. A weak US dollar promotes global economic resonance and recovery, driving domestic export growth and profit improvement. Global monetary policies and liquidity are becoming more accommodative, boosting A-shares and Hong Kong stock valuations. Meanwhile, more global funds are flowing into high-growth emerging markets in search of higher returns. Under the catalysis of a weak US dollar and domestic policies, CICC believes that more overseas and long-term funds entering the market are expected to boost A-shares from the capital side. Structurally, the “new economy,” represented by technology and overseas expansion, is expected to continue performing well in fundamentals and returns. Additionally, driven by expanding domestic demand, anti-inflation measures, and overseas demand, domestic corporate profits may improve, leading to a rebound in consumption and other domestic demand sectors.