Following last Friday’s drop, the spot exchange rate of RMB against the U.S. dollar fell sharply again yesterday after opening, falling nearly 2% that day, indicating short-term depreciation pressure on the RMB.
UBS Securities believes that mid-term depreciation of the RMB is unlikely to occur, but the institution is also worried that the recent spot exchange rate fluctuations of the RMB will change the unilateral appreciation expectations of the RMB held by market investors for a long time.
However, if the RMB exchange rate continues to be weak in the short term, it will also bring volatility to the A-share market.
Textiles and clothing benefit the most
In recent years, the RMB has continued to appreciate, and many domestic export-oriented companies have been under heavy pressure. In turn, the depreciation of the RMB will naturally give these companies a chance to breathe.
Among these export-oriented enterprises, textile and garment enterprises undoubtedly account for a considerable proportion. For many textile and apparel companies whose profits have been swallowed up by the foreign exchange settlement process, RMB depreciation will be one of the most direct means to stimulate their performance growth.
Yesterday, the A-share textile and apparel sector was agitated by the short-term depreciation of the RMB, and nearly 90 stocks in the sector generally rose. As of the close, many stocks such as Youngor, Pathfinder, Longtou Shares, Shenda Shares, and Melya) had reached daily limit. Huafu Colored Textile, Jiaxin Silk, Jihua Group, Jialinjie, etc. all rose by more than 3%. The overall sector The increase reached 3.96%, making it one of the strongest sectors in the two cities yesterday.
According to Flush Capital Flow Data, the net inflow of funds into the textile and clothing sector yesterday was 1.298 billion yuan, second only to the three sectors of computer applications, real estate development, and electrical equipment.
Judging from the specific targets, institutional funds also favor targets in the textile and apparel sector, such as Pathfinder and Good News Bird. According to the public transaction information of the day, Pathfinder was supported by four major institutional seats to attract funds, with a total purchase amount of 97 million yuan, accounting for 13% of the total transaction; Baoxiniao also had two institutional seats to purchase goods, with a total purchase amount of They were 89 million yuan and 36 million yuan respectively, accounting for 34% of the total transaction volume of the stock.
Analysts believe that despite the current downturn in the external market, the short-term depreciation of the RMB may not bring significant incremental orders to textile and apparel companies soon, but the export costs of related companies will still be significantly relieved, which will be a significant factor for textile and apparel companies. The apparel sector is still positive.
In addition, similar to textile and clothing companies, since home appliance companies mostly use US dollars to settle foreign exchange for product sales, the depreciation of the RMB will also relatively clearly increase the exchange income of related companies. Investors can benefit from Gree Electric Appliances and Midea Group. , TCL Group and others paid attention.
Analysts believe that the depreciation of the RMB most directly stimulates textile and apparel exports, and textile and apparel exports rely most heavily on container transportation. Therefore, once export volume increases, it will inevitably be beneficial to the container transportation market and some port operations.
