The interest rate cut is that banks use interest rate adjustment to change cash flow. When banks cut interest rates, the income of funds deposited in banks will decrease, so cutting interest rates will lead to the outflow of funds from banks, and deposits will become investment or consumption, which will lead to increased liquidity of funds. Generally speaking, cutting interest rates will bring more funds to the stock market, so it will help the stock price rise. When banks raise interest rates, the situation is just the opposite. Interest rate adjustment is an important means to implement monetary policy.
Interest rate cuts will promote the expansion and reproduction of corporate loans, encourage consumers to borrow money to buy bulky goods, and encourage financial speculators to borrow money to promote the prosperity of the stock market, which will lead to the devaluation of the country's currency, promote exports, reduce imports, promote inflation and gradually overheat the economy.
What is the impact of interest rate cuts on the stock market?
Generally speaking, interest rate cuts are substantial benefits to the long-term development of the stock market. According to the analysis of relevant experts, the following industries may be affected in the short term:
1. Blue chip, real value stock, low P/E ratio stock, high score bonus stock. The interest rate cut is conducive to further highlighting the charm of blue chip stocks and real value stocks. In particular, a large number of blue-chip stocks and real-value stocks with a P/E ratio of less than 30 times, their dividends are more prominent than the after-tax interest of bank deposits. In particular, the charm of blue-chip stocks, real-value stocks and convertible stocks is calculated in multiples compared with the after-tax interest of bank deposits. Investors can refer to the published annual report, choose white horse stocks with excellent performance, low P/E ratio and more dividends, especially the converted white horse stocks, and invest rationally.
2. Interest-sensitive stocks such as real estate stocks and insurance stocks The above stocks and sectors are interest-sensitive stocks in Hong Kong. Especially for real estate stocks, interest rate cuts will help reduce the burden of people buying real estate by stages, mobilize people's demand for housing, and reduce the burden on real estate developers. The insurance industry is also driven by interest rate cuts and expectations of interest rate cuts. However, the reduction of deposit interest rate is less than that of loan interest rate, which has advantages and disadvantages for banks, and the narrowing of deposit-loan spread has increased the profit pressure of banks; At the same time, it increases the difficulty of bank storage. However, the increase in lending, as well as the recovery and development of the economy, will drive the bank's business volume to climb and help the bank increase its profits. Generally speaking, for banking stocks, it still has a positive effect in the long run, and it depends on whether the funds are sought after in the short term.
3. The downward adjustment of bank interest rates on government bonds and corporate bonds not only highlights the investment value of stocks, but also highlights the investment value of government bonds with an annual interest rate of 2.95% or above and no profits tax. Compared with the after-tax one-year time deposit rate of 1.584%, the interest rate is higher than 100%/.366%. In particular, the deposit interest rate is only lowered by 0.25%, and there are still expectations of interest rate cuts. A slow bull market conducive to national debt and corporate bonds. Judging from Zhuang's stock thinking, the bear market in 2007 led many institutions to invest in national debt. It can be said that the national debt has entered the village. Similarly, corporate bonds may also be mined.
4. Expand domestic demand concept stocks. From the perspective of lowering interest rates, relaxing macroeconomic policies is not a problem, but something that is being implemented. Its key point is to overcome the adverse effects of the sustained slowdown of world economic growth on China's economic development and maintain the sustained, rapid and healthy development of the national economy. In this way, in a broad sense, concept stocks such as steel, cement, building materials and electricity that expand domestic demand also have the opportunity to become beneficiaries of the sustained, rapid and healthy development of the national economy. In the long run, it is possible to be excavated. Once it is confirmed that the above-mentioned stocks are involved in incremental funds on the disk, it should be time to seize the opportunity.
The impact of interest rate cuts on insurance;
Dividend insurance is very popular. Yang Dazu, general manager of China Life Insurance Fujian Branch, analyzed that interest rate cuts have both opportunities and challenges for insurance, but overall it is good news. The disadvantages of interest rate cuts to insurance companies are mainly as follows: for the use of funds by insurance companies, interest rate cuts bring investment pressure, and more importantly, they increase the spread loss and the burden of insurance companies, which will increase the operating risks of insurance companies; After the interest rate cut, insurance companies have to redesign their insurance coverage, which brings the waiting period and adaptation period to the insured, which is not good for insurance sales. On the positive side, interest rate cuts will increase the sales of dividend-paying and refundable insurance. Because the reduction of deposit interest will lead to the reduction of depositors' income, some depositors will choose dividend insurance, which is an ideal personal financial choice with both protection and relatively considerable income.
For the insured, we should have a normal attitude towards this interest rate cut. The purpose of insurance is to avoid risks. If the insured deliberately emphasizes the interests, it will violate the original intention of insurance. For insurance companies, the following work should be done to deal with the negative impact of interest rate cuts: First, strengthen the management and operation of insurance funds and improve the utilization rate of funds. The second is to reduce various costs and exchange the minimum cost for the maximum profit.