By Zheng Buchun

A-shares continued to press ahead with Shanghai Composite finished 0.41% higher at 3253.33 points and Shenzhen Composite 0.95% higher. Small and medium board and ChiNext also gained 0.82% and 1.45% respectively. Stock trading volumes expanded across the board except Shenzhen shares. Growth of white wine stocks and stocks of companies benefiting from the Belt and Road Initiative slowed down a bit. But high-yield dividend stocks and sub-new stocks gained momentum yesterday.

High-yield dividend stocks are often good performers on the A-share market. Their excellent performance yesterday is largely due to China's move to tighten refinancing rules. The new regulations will make listed companies harder to refinance through secondary offerings and acquisitions. Therefore, high-yield dividend stocks regained strength.

I think it is time to reduce cash reserve ratio for several reasons. Specifically, China's cash reserve ratio is higher than the international level. In addition, foreign reserves continue to drop in recent years. The money amassed through cash reserve ratio hikes in previous years should be unlocked. Some people think that will increase deprecation pressure. But the strength of RMB is determined by investor confidence. If investors have confidence in the market, stocks will do well.

Hong Kong shares retreated yesterday, indicating investors fear to chase the market. A-shares are doing well at the moment. But it remains to be seen if the bulls will continue. The growth of A-shares slowed down, which showed signs of fluctuations in the coming days. Based on momentum oscillators and the boom-bust-cycle, it is likely to see price gitters from this Thursday to next Monday. Therefore, investors should be careful.

(Zheng Buchun is NBD's columnist)

Email: tanyuhan@nbd.com.cn