How big is the impact of bank interest rate hikes on the machine tool industry?

Editor's Note : Since July 7, 2011, the central bank has once again raised the benchmark interest rate for RMB deposits and loans of financial institutions. The one-year deposit and loan benchmark interest rates were raised by 0.25 percentage points respectively, and the benchmark interest rates for deposits and loans of other grades and the personal housing provident fund loan interest rate were adjusted accordingly. This is the third time the central bank has raised interest rates this year. Frequent interest rate hikes have advantages and disadvantages for the development of the machine tool industry? This article combines relevant data and professional opinions, briefly analyzes this, and has certain insights into this phenomenon, for reference only. In 2011, the central bank raised interest rates frequently. In 2010, China's economy showed a strong recovery. In 2011, it continued the development of a good situation in the previous year. The machine tool industry has continued its upward trend in a good economic environment and is stabilizing. The market rebounded and the import and export volume increased. According to statistics, in 2011, the total import and export volume of China's machine tool products exceeded US$20 billion for the first time, reaching US$22.75 billion, a year-on-year increase of 57.5%. However, due to rising prices and excessive housing price growth, it has always been valued by the society and affected people's lives. In order to reduce the investment in some industries too fast, the central bank raised interest rates three times in 2011. For the first time, since February 9, 2011, the benchmark interest rates for one-year deposits and loans of financial institutions have been raised by 0.25 percentage points, and the benchmark interest rates for deposits and loans of other grades have been adjusted accordingly. The second time is that since April 6, 2011, the one-year deposit and loan benchmark interest rates of financial institutions have been raised by 0.25 percentage points. The third time is from July 7, 2011, the one-year deposit and loan benchmark interest rate will be raised by 0.25 percentage points. Negative impact:
Raising interest rates brings high costs

For interest-raising companies, there are generally interest rate hikes and deposits to raise interest rates. Of course, loan interest rate hikes are more direct and have the greatest impact on enterprises. This is the direct concern of enterprises. The most direct impact of bank interest rate hikes is to increase the cost of capital for machine tool companies and increase the expenditure on financial expenses such as interest, especially for capital-intensive industries or companies with high asset-liability ratios. The biggest impact of bank interest rate hikes is the state-owned enterprises with more borrowing, which will greatly increase the production and operation costs of enterprises and reduce the profitability of enterprises. The cost of equipment, consumables, and parts of the machine tool enterprise has become higher, which has brought certain pressure on the enterprise. Financing difficulties due to interest rate hikes With the high reserve requirement ratio, the financing of some SMEs has become difficult, especially in manufacturing companies with slower capital recovery, the financial pressure will be even greater. Different from other industries, the profit margin of machine tool enterprises is generally low. Except for some large enterprises that have sufficient funds in terms of funds, most SMEs still need to use bank loans when investing in new plants and equipment. achieve. The data shows that the latest increase in the reserve ratio can freeze the banking system's funds of more than 370 billion yuan, of which the small and medium-sized bank reserve ratio rose to a high of 18%, and many small and medium-sized machine tool enterprises that use small and medium-sized bank loans as the main financing channels. To a certain extent, it has led to increased financing pressure. It has certain impact on the business income and cost, or demand of some industries, such as banking, real estate, automobile, financial leasing machinery and equipment, and affects downstream related industries. The interest rate hike will lead to an increase in the necessary rate of return on investment funds and reduce the valuation of enterprises. It will also affect the allocation of investors among different assets. The return of bank deposits may increase, which has an adverse impact on the stock market. At present, major banks have tightened the scale of loans, which has brought certain difficulties to SME loans. Under such circumstances, if enterprises want to purchase mechanical equipment to expand reproduction, financing will undoubtedly become the biggest problem. This will inevitably affect the future sales expectations of machine tool companies. These small and medium-sized manufacturing enterprises are the main customer groups of small and medium-sized machine tool enterprises. Although orders are still in the short term, we have to doubt that if the bank’s monetary policy continues to shrink, the purchasing power of major customer groups will decline. The impact on small and medium machine tool enterprise orders will increase. positive influence:
Interest rate hikes bring new opportunities Some companies that rely on technology and technological innovation to win will be able to stand out in this social context. For example, in the field of CNC machine tools, CNC systems, various types of combined machine tools, new products, with high-quality service and good reputation in the competition of the entire industry. Raising interest rates may bring new opportunities to companies of this type. Like June 28th, Guilin Fuda Group produced 14,000 tons of double crank hot die forging press, becoming the world's largest hot forging press. The energy consumption index of the project has reached the advanced level of countries such as Europe, America and Japan. Raising interest rates brings more profits

The cost increase of machine tool companies is on the one hand, but equally, lucrative profits are also expectations after raising interest rates. After all, the machine tool industry belongs to the category of heavy industry. The transaction volume of single machine is often higher. With the expansion of production scale, the normalization of operation does not affect the profitability of enterprises. On the contrary, if it can independently develop, improve performance and improve various precision indicators, Will get more benefits. [MTpage] Interest rate hikes inhibit blind investment In today's highly developed market economy awareness, Imagine that each enterprise's decision makers will not violate the objective laws of the economy and invest in expansion regardless of cost. Of course, to curb the blind investment expansion of enterprises, the leverage of interest rates is limited, and the state has other hard measures, such as restricting loans, restricting land use, and strict examination and approval. The interest rate hike is conducive to reasonable mergers and bankruptcies for some machine tool enterprises that are not strong and have no potential for development. The entire industry is in a good competitive state. Banks raise interest rates for three major purposes The central bank official said that raising interest rates is an important decision we made to further consolidate the results of macroeconomic regulation and control and maintain the good momentum of sustained, rapid, coordinated and healthy development of the national economy. Specifically, the first is to continue to consolidate the effectiveness of the previous macroeconomic regulation and control. Since 2003, China’s economy has continued to grow rapidly. At the same time, investment in fixed assets has risen sharply, and investment in a small number of industries has grown too fast, which has already jeopardized the sustained and healthy development of the economy. In order to slow down the growth rate of fixed asset investment, the central bank has used monetary instruments such as raising the deposit reserve ratio and open market business, and achieved certain results. Subsequently, the central bank forcedly intervened financial institutions' credit support for steel, electrolytic aluminum, cement and other industries, and further controlled the growth of fixed asset investment. The second is to prevent inflation and stabilize market prices. Since the beginning of the year, China's consumer price index (CPI) is at a relatively high level, and has been hovering around 5% of the warning line. From the figures released by the National Bureau of Statistics, from January to September, the CPI increased by 4.1% over the same period of last year, of which September increased by 5.2% year-on-year, down from last month. The rise in food and food prices is the main force driving the rise in CPI. At present, China's autumn grain harvest, the rising trend of CPI led by food prices, is expected to ease after the autumn harvest, but a new round of international oil prices, power, coal and other energy supply tension, has been transmitted to consumer goods prices through multiple transmission mechanisms, CPI may It will remain high and needs to raise interest rates to prevent inflation. The third is to enhance residents' confidence in saving and ease the liquidity risk of the banking industry. Since December 2003, China’s savings deposit interest rate has been negative for nine consecutive months. Especially in the past three months, the CPI has been at a high level of more than 5%, and the negative interest rate of deposits is at a relatively high level. Affected by this, since the first half of the year, the growth rate of household savings deposits has gradually slowed down, and even a negative growth has occurred. The money in the hands of the residents began to flow to the real estate market. At the same time, the diversion of savings deposits has led to a reduction in the available credit funds in the banking industry. The contradiction between “short-term long-term loans” has become more prominent and liquidity risks have increased. The central bank hopes that through the guiding role of this interest rate hike, it will guide residents to increase long-term savings deposits, further enhance the stability of savings deposits, and ease the pressure on liquidity risks in the banking industry. [MTpage] may raise interest rates in the end. Huitong.com announced that Jackson, the senior strategist of Royal Bank of Canada Capital Markets, said on Wednesday that China’s second-quarter GDP growth was higher than expected, indicating that the Chinese government may continue to control inflation. Tightening monetary policy. Jackson said: "There is no doubt that we are witnessing a slight slowdown in China's economic growth, but the pace is very stable, which will help alleviate our concerns about the risk of a hard landing for the Chinese economy. Moreover, this has indeed increased the central bank's continued interest rate hike. The possibility. I expected the central bank to raise interest rates only once in the third quarter, but today's data raises the risk of the central bank increasing the number of interest rate hikes in the second half of the year." China's National Bureau of Statistics announced earlier Wednesday that the GDP in the first half of 2011 was 2,044.9 billion yuan, a year-on-year increase of 9.6% at comparable prices; among them, the first quarter increased by 9.7% and the second quarter increased by 9.5%. Previously, the market expects GDP growth of 9.4% in the second quarter. In addition, the economic growth rate in the second quarter also accelerated on a quarterly basis. The GDP of the quarter increased by 2.2% from the previous quarter, and the growth rate in the first quarter was 2.1%. In terms of industries, the added value of the primary industry was 1.57 trillion yuan, an increase of 3.2%; the added value of the secondary industry was 1,1027.8 billion yuan, an increase of 11.0%; and the added value of the tertiary industry was 865.81 billion yuan, an increase of 9.2%. From the ring, the GDP in the second quarter increased by 2.2%. [MTpage] Machine tool enterprises rely on scientific and technological innovation and healthy development How to survive the machine tool industry in the case of fierce interest rate hikes. "Wealth Management Weekly" is optimistic that the growth of the machinery industry will continue. In the future, with the support of high-end equipment and emerging industrial equipment in the “Twelfth Five-Year Plan”, these areas will grow rapidly, which will drive the overall growth of the machinery industry to maintain a relatively fast growth trend. It is expected that the compound growth rate of the industry will be 22 in the next five years. Between % and 25%. Focus on the construction machinery industry's Zoomlion, Xugong Machinery, Changlin shares, as well as the machine tool industry Shenyang Machine Tool, Tianma shares. Personally believe that: as long as the machine tool enterprise establishes a sense of innovation, attaches importance to independent research and development of technology, increases investment in science and technology, takes domestically-made routes, and appropriately introduces advanced technologies, it is sure that it will not be too much in the context of the central bank’s interest rate hike. Impact, reduce impact, and achieve healthy and sustainable development.
 

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