Approaching the Spring Festival holiday, A-share investors are facing a “soul torture”: holding money or holding shares? Especially this year, in the first month of this year, we are facing a “treacherous” investment situation, which makes investors more uneasy.
According to the data of , as of the closing on January 27, 4207 shares have fallen this year. The average rise and fall of the two cities is – 10.31%, with a median of – 11.43%. This means that as long as you are short in January this year, you can outperform most investors.
The pessimism of the market continued to spread, and even made a number of official media collectively issue the call to “stand up the backbone of a shares”.
three market conditions behind large losses
The large-scale loss since January has become a fact. Investors are more concerned about whether the “spring dry market” can be recovered after the festival? According to past experience, after the long holiday, due to institutional positions, abundant funds and other factors, the trading volume of A-Shares will have a wave of restorative increase, so as to promote the market.
But at present, there are three market phenomena that increase the uncertainty of the market after the year:
1. The turnover dropped sharply
At the close of trading on January 20, the turnover of the two markets exceeded 1 trillion yuan for the 15th consecutive trading day. However, from January 21 to 27, the average daily turnover of the two cities was less than 1 trillion . Even the sharp decline of the two cities on January 25 and 27 did not return the trading volume to trillion, which means that institutional funds have generally become cautious.
[21 little knowledge: turnover and volume are the most intuitive response to market activity. Large stock market prices are generally accompanied by high activity. For example, the more people line up in a hotel, the more people subconsciously think the hotel is delicious, and then there are more people lining up. Vice versa, the colder the market, the higher the possibility of changing the market.]
2. Foreign capital crazy buying and domestic capital crazy selling
Some investors make complaints about the situation, which is the most wonderful scene ever seen since the bank’s interest rate increase, and the central bank’s interest rate cut. Buying funds from the north and selling funds from the mainland.
According to the data of China stock market news, as of the closing on January 27, even if the net outflow of northbound funds on that day exceeded 10 billion, the net inflow of northbound funds still exceeded 100 billion in the whole month.
In the same period, large capital outflows continued. Since January, the net outflow of main capital has exceeded 50 billion in four days. On January 25 alone, the net outflow of main funds reached 72.926 billion. (net outflow of main funds: transaction orders greater than or equal to 500000 shares or 1 million yuan, purchase transaction volume – sales transaction volume)
3. It is almost certain that the Federal Reserve will raise interest rates in March
On January 27, Beijing time, after the Fed’s two-day policy meeting, Fed chairman Powell said at a news conference that the Fed is ready to raise interest rates in March and will take appropriate actions to combat rising inflation.
Powell stressed that since the last policy meeting of the Federal Reserve in December, the inflation outlook has deteriorated, and the supply chain problem may not be solved by the end of 2022. The US consumer price index (CPI) rose 7% year-on-year last month to its highest level in nearly 40 years, according to the US labor office.
As of the time of publication, major stock indexes in the world had seen large declines, with the Nikkei 225 index down more than 3%, the Hang Seng index down more than 2%, South Korea Kospi down more than 3.3% and Australian common shares down more than 1.8%. The two A-share markets were not spared, with the Shanghai index down 1.78% and the Shenzhen composite index down 2.77%.
As for the consequences of the Fed’s interest rate hike, Xinhua News Agency previously published a commentary that said, in the 1980s, the Fed raised interest rates continuously, resulting in a sharp increase in international borrowing costs and detonating the debt crisis of Latin American countries. this time, in response to the pressure of high inflation, the Federal Reserve has repeatedly released signals that it may raise interest rates in advance and start the process of balance sheet reduction. The IMF warned that this could lead to capital outflows and currency devaluation in emerging markets, tightening the global financial environment.
the consensus expectation of “credit relief is effective” is disintegrating
From the market since January, the market style has rotated rapidly, the expectation is chaotic and lacks the main line, and the central bank’s interest rate cut has failed to reverse the market pessimism. from a macro point of view, the consensus expectation that “wide credit will be effective at the beginning of the year” is disintegrating.
1. It is not easy for real estate to “see the bottom”
Tianfeng macro wrote that it is not easy to see a soft landing in real estate at present. From January 1 to 14, the transaction area of commercial houses in 30 cities was – 24.9% year-on-year, and the prosperity was still at the lowest level in the same period since 2012, and there was no sign of recovery before the Spring Festival.
Tianfeng macro believes that the long-term expectation of real estate has changed. In the context of housing without speculation, the long-term expectation of buyers for the return on investment in housing, the long-term expectation of developers for the gross profit rate of commercial development, and the long-term expectation of local governments for the cooperative symbiotic relationship with developers have changed.
the change of long-term expectation may make this round of real estate sales and land bottoming longer than the historical cycle.
2. The growth elasticity of infrastructure may still be lower than expected
Under the policy tone of steady growth, there are more funds available for overall fiscal planning at the beginning of the year. According to the issued and pre disclosed information, the issuance scale of special bonds increased by 151.2 billion from January 1 to 21, with an issuance progress of 10.4%. There are also 1.2 trillion special bonds issued in the fourth quarter of 2021, as well as the carry over balance of general public budget and government funds. However, up to now, sufficient financial funds have not yet reflected the effect of expenditure.
Since the beginning of the year, high-frequency data such as apparent consumption and industrial operating rate reflecting the supply and demand of infrastructure related industries are still very weak. In the second week of January, the apparent consumption of rebar decreased by 182000 tons year-on-year in recent three years; Cement prices fell 2.4% month on month, still falling. The operating rate of blast furnace was – 2.6% year-on-year, the capacity utilization rate of cement clinker was + 7.8% year-on-year, the operating rate of petroleum asphalt plant was – 5.8% year-on-year, and the operating rate of automobile semi steel tire was – 3.4% year-on-year.
In this regard, Tianfeng macro believes that in the past few years, although the volume of traditional infrastructure is still large and still plays an important role in stabilizing economic growth, the elasticity continues to be lower than expected. This is because the long-term expectation of infrastructure has also changed. for local governments, the performance appraisal mechanism is no longer based on GDP. Even if the short-term importance of stable growth is significantly improved, other long-term objectives should also be considered, such as implicit debt, lifelong accountability, ecological protection, carbon emission dual control, etc. .
Therefore, the elasticity of infrastructure growth this year may still be lower than the previously high expected level of the market.
focus on an important meeting
From the current situation, as the recovery of the above industry situation is lower than expected, all parties have not yet made a clear judgment on how to further make China’s policy on “stable growth” and what is the impact of the Fed’s interest rate hike. Therefore, some securities companies believe that the market trend observation period should be postponed to around the “two sessions”.
Dr. Xiong yuan, chief economist of Guosheng securities, wrote an article to analyze the situation of the local “two sessions” and summarized the key concerns of the nine national “two sessions”. [as of January 24, 30 provinces have held “two sessions” (postponed in Tianjin), and the national “two sessions” will be held from March 4 to 5.]
The article believes that the “two sessions” in 2022 will generally continue the main tone since the central economic work conference on December 10, that is, take economic construction as the center, carry out cross cycle and counter cycle simultaneously, and make every effort to stabilize growth. The national GDP target rate in 2022 is about 5.5%, loose real estate, expanding infrastructure and promoting consumption are the main focus, and scientific and technological innovation, double carbon, high-end manufacturing Digital economy is the focus of industrial transformation , focusing on institutional dividends such as state-owned enterprise reform and urban agglomeration.
signal 1: steady growth is the top priority of local work in 2022.
signal 2: the GDP target of most provinces is higher than 5.5%, and the national GDP target rate in 2022 is about 5.5%.
signal 3: there are three main focuses for steady growth in various regions: loosening real estate, expanding infrastructure and promoting consumption.
signal 4: stable employment is still a hard requirement, and the 24 provinces plan to add a total of 13.91 million jobs.
signal 5: industrial policy has four key points: scientific and technological innovation, double carbon, high-end manufacturing and digital economy.
signal 6: the reform policy was further promoted, focusing on the reform of state-owned enterprises.
signal 7: regional policies continue to be strengthened, focusing on Rural Revitalization and the coordinated development of metropolitan urban agglomerations.
signal 8: risk prevention is still the focus, mainly local implicit debt risk and real estate risk.
signal 9: other concerns: epidemic prevention and control, common prosperity, etc.
Huatai Securities Co.Ltd(601688) according to the strategy, from the end of the festival to the window period of the “two sessions”, the short-term hedging repression is lifted, the medium and long-term policy strength is expected to increase, and A-Shares are expected to rebound in stages after “squatting”.
The Research Report of China Merchants Securities Co.Ltd(600999) also has a similar judgment. It believes that the convening of the local “two sessions” may strengthen the market’s expectation of stable growth. If the central bank’s monetary policy is further substantially loose and the force of stable growth after the “two sessions” is superimposed, it is expected to bring a turnaround for a shares. Throughout the year, steady growth may lead to a phased drift from the style of 2-4 quarters to the market value.
surging news editorial: what to take to prop up the backbone of A-Shares
On January 26, two major industry newspapers, securities daily and securities times, respectively published heavy articles on the front page: calling on institutional investors to overcome the tendency of short-term investment, “shoulder the main responsibility of leading value investment” and “stand up the backbone of a shares”; “Decline is the biggest test, and patience is often the premise of obtaining excess returns”.
At present, China’s economy is facing triple pressures such as shrinking demand, supply shock and weakening expectation. This is reflected in the change in the valuation methods of different listed companies in the market. For example, for listed companies in the new economic field, the market pays more attention to their predictable profitability and cash flow ability, rather than pure speculation on conceptual themes, for listed companies in the traditional economic field, The market is more inclined to evaluate its cold resistance and pressure resistance. The conversion of this risk pricing model will inevitably lead to the valuation adjustment of the market.
At present, the institutionalization of China’s capital market has made great progress. By the end of 2021, the management scale of China’s public funds has exceeded 25 trillion yuan, reaching 25.57 trillion yuan, and the management scale of private funds is close to 20 trillion yuan, reaching 19.76 trillion yuan. It can be said that China’s capital market has become an institution LED market.
Let institutional investors play the role of ballast stone and setting star, but we should also see that institutional investors belong to agency financial management, behind which is the investment client. The performance of institutional investors directly affects the survival and development of their practitioners. The funds used by institutional investors in the secondary market belong to entrusted funds, and many of them are open-end funds. Once the primary and secondary investors are not optimistic, or touch the relevant terms in the public and private placement agreement, investors will redeem the public and private placement products, which will trigger a market linkage reaction.
Since the beginning of this year, A-Shares have continued to decline. In fact, many of them are the withdrawal of institutional investors on the asset side, triggering the redemption terms. However, institutional investors not only failed to make corresponding liquidity management arrangements, but also some even added leverage in disguised form, resulting in the redemption of investors, leading to a run on the secondary market, and institutions passively and actively selling stocks, so as to improve the market operation, The endogenous valuation adjustment in the market is expressed by the market sentiment of “falling endlessly”.
At present, the mutual trust between investors and managers is not strong, and many of them are still constrained by contract terms, that is, at present, institutional investors are mainly contract funds, and there are few corporate funds. This kind of contract setting is fundamentally the lack of trust of investors in the professionalism of managers. After all, strictly speaking, Chinese institutional investors have not really experienced a complete economic cycle and investment cycle. Most of them, whether public offering or private placement managers, do not have the ability to become an investment manager with complete independent credit qualification, especially many fund managers, pay more attention to the ability of investment and lack the level of management, It is most intuitively reflected in the liquidity management of its fund, that is, the fund management does not take into account the liquidity risk, resulting in more offensive spears and less defensive shields with the role of safety cushion.
In addition, when financing the establishment of the fund, it emphasizes more on sales and ignores matching, that is, it does not effectively match the risk strategy of the fund with the risk preference and risk carrying capacity of investors, which leads to the problem of internal stability of the fund itself.
In short, at present, China’s capital market has entered the initial stage of institutional dominated market. In order to effectively reduce the risk of market disorder and disorder, institutional investors need to build trust with professionalism, and regulators need to shape market order with a market-oriented, legal and international business environment.
media review
Front page of Securities Daily: erect the backbone of a shares
Front page of Securities Times: keep the cloud open and see the moon bright
Financial investment news: A shares “stand up” need capital and confidence to go together
self purchase of funds
A big wave of head public offering and hand protection! Starting with tens of millions of self purchase, with a maximum of 200 million yuan, there are also great moves by famous generals such as Lin Yingrui, Zheng chengran, Zhang Kun and Zhu Shaoxing
What is the signal of the collective self purchase of the six public offering giants? A shares fell sharply, and a number of funds opened their subscription. Is the “emotional bottom” in sight?
institutional view
Citic Securities Company Limited(600030) : “emotional bottom” and “market bottom” resonate, and market overshoot brings better buying points
Huatai Securities Co.Ltd(601688) : A shares are currently cost-effective, short-term disturbance does not change the medium and long-term trend
Haitong Securities Company Limited(600837) : empty energy is released, and the stock index will rebound technically at any time
