Tuesday, March 30, 2010

China Strategy A Revisit to Rmb Revaluation’s Market Implications $CNY

 Qing Wang an economist at morgan stanley, assumes in his base-case scenario that the Rmb will resume its gradual appreciation with an initial marginal revaluation in early 2H10 such that the Rmb could appreciate against the USD by 4-5% in 2010. We think this could put China in a more favorable liquidity condition compared to mature markets and the other emerging markets. At micro levels, a strong Rmb also has implications for corporate fundamentals. We view likely key beneficiaries as airlines, oil refiners, and steel makers, while on the downside are mostly exporters and those with de facto dollarpegged revenue, such as nonferrous refiners.






China Strategy A Revisit to Rmb Revaluation’s Market Implications

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