[editor’s note]
2021 is an extraordinary year. Behind the twists and turns of the A-share market is the silence of the traditional white horse stocks represented by the “Mao index” and the sudden emergence of the “Ning combination” industrial chain.
Entering the new year of 2022, how will the capital market perform? Recently, surging news reporters interviewed a number of chief strategic analysts, chief economists and star fund managers of securities companies to grasp the new main line of investment, tap new market opportunities and look forward to the new trend of the market.
This journal is a written interview with Huang Wentao, chief economist of China Securities Co.Ltd(601066) securities and co head of research and development department. Huang Wentao has won the best analyst of new wealth for many times.
For the macro economy in the year of the tiger, Huang Wentao believes that it is expected to achieve more than expected growth. In a few months, “great downward pressure on the economy” may become “yesterday’s story”.
“First, with the weakening of the impact of the epidemic, the logic of service industry and consumption repair has begun to be reflected, and it is expected to go further in 2022. Second, the effect of stabilization policies is expected to be concentrated in 2022. At present, the main line of policies can be said to be ‘there are no policies conducive to stability, but more policies conducive to stability’.” Huang Wentao said.
Huang Wentao judged that under the condition that the low base effect of GDP still exists, GDP is expected to grow by 5.9% in 2022.
What is worthy of investors’ attention is that for the A-share market with sluggish performance since the beginning of 2022, Huang Wentao believes that the current time point can be gradually optimistic about A-shares.
“Although A-Shares fell in panic under the double attack of internal growth pressure and external policy pressure before the closing of the Spring Festival, the adjusted allocation value of A-Shares began to appear from the macro perspective of economic growth, external policy, capital flow and relative allocation value.” Huang Wentao said.
For overseas interest rate hikes and table contractions and liquidity tightening expectations, Huang Wentao believes that although the general direction of the Fed’s tightening is more certain, the probability of interest rate hikes and table contractions falling short of expectations is still high in terms of rhythm. The Fed has published very limited new information. For example, when to shrink the table and the conditions under which it occurs are not described.
“In this regard, the Fed may not have reached an agreement on the judgment of austerity, or the future rhythm will still depend on the specific data.” Huang Wentao pointed out.
For the next “steady growth” direction, Huang Wentao said that there are three main dimensions: first, stabilize the traditional infrastructure, second, accelerate the promotion of emerging infrastructure, and third, the transformation and upgrading of manufacturing industry.
the following is an exclusive interview with Huang Wentao by surging journalists:
surging news: what do you think of the macro-economic operation in the year of the tiger?
Huang Wentao: overall, I think the economic growth in 2022 is expected to exceed expectations. In a few months, “great downward pressure on the economy” may become “yesterday’s story”.
Specifically, first of all, the impact of the epidemic weakened in the fourth quarter of 2021, and the logic of service industry and consumption repair has begun to be reflected. It is expected to go further in 2022.
Although the number of newly confirmed cases of the epidemic in the fourth quarter of 2021 rebounded, the impact of the number of severe cases and the sensitivity of the government and residents to the new round of epidemic was weaker than that of the first entry of delta mutant strain in the third quarter. Meanwhile, with the substantial improvement of China’s epidemic prevention and control conditions and the gradual weakening of the impact of the epidemic, the service industry and consumption are expected to enter the recovery cycle, driving the economy to further repair.
Secondly, since the fourth quarter, policies conducive to stability have been introduced continuously, and the policy effect is expected to be concentrated in 2022. At present, the main line of the policy can be said to be: “no policies that are not conducive to stability will be introduced, and more policies that are conducive to stability will be introduced”. From the central government to major departments, the short-term goals are focused on steady growth, and macro policies and industrial policies are advancing in the direction of steady growth.
Thirdly, there is still a low base effect in GDP in 2021. In 2021, under the impact of the epidemic and tight macro policies, China’s economic operation was weak, but the year-on-year growth rate of GDP was still as high as 8.1%.
surging news: for the “expected target of GDP growth” in 2022, the market currently has two main expected targets of 5% and 5.5%. What’s your opinion on this?
Huang Wentao: I think GDP is expected to grow by 5.9% in 2022, exceeding expectations.
Specifically, China’s GDP growth rate will be 6% or above before 2019. At the same time, according to the calculation and Research on China’s potential output and growth momentum during the 14th Five Year Plan period by the central bank, if the economy operates normally, China’s GDP potential growth rate will be 6% and 5.7% respectively from 2020 to 2021, then the average growth rate in the two years will be 5.8%.
At present, China’s average growth rate in 2021 is only 5.1%. In fact, it is significantly lower than the potential level. Therefore, there is still a low base effect and there is still room to move closer to the potential level.
The calculation shows that if the GDP increases by 5.9% year-on-year in 2022 and the average growth rate of GDP in three years is 5.4%, the potential three-year average growth rate under normal economic operation should be 5.7%, which is still a gap compared with the potential level, so it is not overestimated.
surging news: at the beginning of 2022, the decline of A-Shares attracted extensive attention. What do you think of the performance of the capital market in the year of the tiger?
Huang Wentao: at the current time point, we can gradually be optimistic about a shares.
Although before the Spring Festival holiday, A-Shares fell in panic under the double attack of internal growth pressure and external policy pressure. However, from the macro perspective of economic growth, external policies, capital flow and relative allocation value, the allocation value of A-Shares after adjustment began to appear.
First of all, China’s economy is at the bottom stage. Under the tone of steady growth, whether it is the total growth rate or the industrial structure, continuous improvement on the margin is a high probability event.
Secondly, the real risk of Fed tightening has been exaggerated in the short term, the ballast of China US relations is stronger than before, and the negative expectations of external policies have been fully or even overreacted.
Thirdly, the long-term trend of foreign capital inflow in 2022 remains unchanged, and the attraction of A-Shares is still increasing. In the year of the tiger, even if there is a short-term disturbance due to factors such as interest rate spread and exchange rate, the RMB exchange rate is expected to remain in a strong range. China’s leading companies continue to become bigger and stronger, and the general trend of foreign capital flowing into A-Shares will not change.
Finally, the value of A-Shares in residents’ asset allocation is getting higher and higher under the background of new asset management regulations, lower interest rates and non speculation in housing and housing. At present, the proportion of residents’ wealth in China’s stock assets is still not high. With reference to overseas experience, there is still much room for improvement.
surging news: at present, the tightening signal of overseas liquidity has attracted much attention. What do you think of the interest rate hike and tightening in peripheral markets?
Huang Wentao: at present, although the general direction of the Fed’s tightening is more certain, in terms of rhythm, the probability of raising interest rates and shrinking the table is still very high.
At present, the Fed’s interest rate hike in March 2022 has been the consensus expectation of the market, but the more critical thing is whether to raise interest rates continuously in the future and start to shrink the table in June.
However, the Fed did not answer the question in detail, but reiterated the framework. The Fed has published very limited new information. For example, when to shrink the table and the conditions under which it occurs are not described.
In this regard, the Fed may not have reached an agreement on the judgment of austerity, or the future rhythm will still depend on the specific data. In this context, market uncertainty continued to exist before the interest rate meeting in late March.
surging news: what do you think of the specific force path of “steady growth” next?
Huang Wentao: generally speaking, the direction of steady growth investment in 2022 mainly has three dimensions: first, stabilize the traditional infrastructure, second, accelerate the promotion of emerging infrastructure, and third, the transformation and upgrading of manufacturing industry.
In terms of traditional infrastructure, policies mainly focus on transportation, water conservancy, urban transformation, affordable housing and other fields. Transportation infrastructure projects are the most frequently mentioned types, involving urban rail, high-speed rail, expressway, rural road transformation and so on.
In terms of new infrastructure, digital economy has become a key area of concern for all provinces. All provinces will combine the digital economy with new infrastructure, focusing on infrastructure construction such as 5g base stations, digital parks and big data centers.
In terms of the transformation and upgrading of the manufacturing industry, local governments still focus on innovation as the focus of the upgrading of the manufacturing industry, and all localities actively guide the establishment of a number of “specialized and special new” enterprises to solve the bottleneck problem.
Among them, “specialized and special new” enterprises master industrial cutting-edge technologies, and cultivating and developing such enterprises will help to enhance the security of China’s information technology industry and improve the ability of independent innovation and development of science and technology, which is of great strategic significance.
surging news: what risks do you think you need to pay special attention to in the next economic operation?
Huang Wentao: it mainly focuses on three risk factors: the first is the rebound of the epidemic, the second is the increased uncertainty of the external environment, and the third is that the policy is less than expected.
