The week before the Spring Festival, the Shanghai stock index fell 4.57%. How will A-Shares operate next week? We have summarized the latest investment strategies of major institutions for investors’ reference.
Xingzheng strategy: the four conditions for a good start have been met
After the festival, with the gradual mitigation of risks at home and abroad, the continuous implementation of loose policies, the gradual improvement of the stock game pattern, and the congestion of popular tracks falling below the low level, the market will usher in a “good start”. Structurally, focus on the “small high-tech” with deep adjustment, full release of congestion pressure and still good prosperity. At the same time, the direction of China’s policy relaxation is determined, and the “mini version 2014” is on the way. The layout on the left benefits from the “big finance” of “stable growth” and “wide credit” at the margin. 1) “Small high tech”: after the adjustment since the beginning of the year, the current transaction congestion has dropped to a historically low level, and the pressure from position concentration and transaction congestion has been significantly released. On the premise of confirming the direction of prosperity, it is expected to rebound gradually in the follow-up. 2) “Big finance”: we judge that a wave of index market similar to “mini version 2014” is expected to appear this year. As a top-down logical support and a “place with few people”, large financial sectors such as banks, real estate and securities companies are expected to usher in repair. Currently, it is still the window with the layout on the left.
CITIC strategy: double bottom resonance meets the starting point
The collapse of the high-level group in January triggered a capital chain reaction, and the peak of market liquidity pressure before the festival has appeared; The credit inflection point still needs time to be verified. There are many highlights in the annual report forecast. At present, it is the bottom of the fundamental expectation; The effect of the long Spring Festival holiday is superimposed on overseas risk concerns. There is an excessive release of risk concentration before the festival, and the bottom of sentiment has also appeared. First of all, the sudden collapse of the early January brought about a concentration of warehouses and reduced positions. External negative events aggravated the financial reaction. The preganglionic effect further led to the rapid arrival of market liquidity pressure, and a series of steady market signals were postponed to post holiday fermentation. Secondly, the joint efforts of steady growth policies are on the way. In the first quarter, the economy or the future will be strong, the epidemic damaged sector will fall into bad territory, and the forecast of leading performance in the field of new energy is higher than expected. Finally, with the digestion of forced sales and the rise of the purchase volume of passive products, the market liquidity risk has been fully released, China’s credit risk has been mitigated, the emotional impact of overseas currency tightening has passed the peak, various market sentiment indicators have been close to the extreme point, and the panic of investors before the festival has been excessively released. The policy bottom has long been clear. Under the resonance of “emotional bottom” and “market bottom”, the overshoot of A-Shares has brought a better time point for the layout in the first half of the year. It is suggested to actively layout around two low positions to meet the starting point of the market.
Monarch strategy: spring returns and the earth warms up at the beginning of the year
The A-share tiger year is about to start, and the negative factors before the festival have been gradually weakened. The market will gradually recover with the upward revision of positive factors and actively increase positions at the beginning of the year. 1) At the current time point, the negative factors before the festival have been significantly weakened. Before the holiday, the Fed’s expectation of raising interest rates continued to increase, and the global equity market continued to adjust. However, during the Spring Festival, with the digestion of the negative impact of liquidity expectations, US stocks stabilized and rebounded. The adjustment of US stocks on Thursday was mainly due to the drag on the performance of heavyweights rather than the change of liquidity expectations. At the same time, considering that A-Shares have gradually priced the changes of liquidity expectations before the festival, the negative impact margin of overseas liquidity expectations will continue to weaken in the future. In addition, in terms of risk appetite, the geopolitical conflict between overseas Russia and Ukraine is alleviated, the credit risk of China’s real estate will also be gradually implemented, and the negative factors at the denominator end are significantly weakened. 2) Positive factors will be gradually revised upward. In January, the local two sessions were held one after another, with strong demands for steady growth. Many governments raised the target growth rate of fixed asset investment in 2022, and infrastructure and manufacturing will become an important starting point. With the approach of the national two sessions in March, the steady growth policy will be accelerated and put into force. 3) In addition, from the perspective of calendar effect, it can also be observed that the market performance after the Spring Festival over the years is significantly better than that before the Spring Festival. On the whole, the market is expected to gradually warm up after the Spring Festival and actively increase positions at the beginning of the year.
Guosheng strategy: opening of the market in the Lunar New Year
First, recent fluctuations in US bond interest rates have converged, overseas risk appetite has stabilized and warmed up, and peripheral shocks have been basically released; Secondly, with the successive landing of interest rate and reserve requirement cuts in recent years, macro liquidity has been further abundant; The amount of public offering has stabilized and rebounded since mid January, and the lack of incremental funds in the short term is expected to be alleviated; Moreover, with the recent decline in the interest rates of the stock market and treasury bonds, the equity risk premium of the broad-based index has risen to + 1 times the standard deviation area, and the cost performance of stock bond allocation has gradually emerged; Finally, historical experience shows that the market risk appetite has improved significantly from the Spring Festival to the two sessions, and the overall performance of A-Shares is not poor. The market is expected to fall at the end of the lunar year, and the market is expected to start in February.
Livelihood Strategy: looking forward to the spring and waiting for the upward force of the market
The policy of steady growth and broad credit will certainly have a “time lag”, and the trading logic of the market is the expectation run – the verification of fundamentals, which leads to the fluctuation of stock prices. The total amount of financial data in December has improved, but the structure is poor. However, it should be recognized that the stabilization of the total amount will be the verification of policy promotion, and the optimization of future structure is the source of new consensus. Investors can “follow the general trend and counter the small trend”: the current difference in inflation levels between China and the United States makes China finally able to exchange upward inflation for the recovery of economic growth. At present, it is more to wait for positive signals after adjustment and the formation of a new consensus in the market. It is worth noting that the performance resilience of the financial and middle and upper reaches sectors in the fourth quarter is different from the sharp decline in performance in the past during the economic recession. Under the change of trend, we should pay attention to the performance elasticity in the process of future demand recovery.
Guohai strategy: Yunkai Yueming remains optimistic about the post festival market
At present, the economy has been running near the bottom of this round of downward cycle. With the gradual appearance of the effect of steady growth policy, Q2 is expected to be gradually confirmed; China’s liquidity and policies are favorable to equity assets. Looking forward to the national two sessions from the local two sessions, it has become a consensus to promote steady economic growth, and infrastructure and consumption will be the main focus; Overseas, the market is gradually taking into account the worst expectations. It is expected that the fermentation stage is often the most pessimistic moment in a round of tightening cycle. It is expected that the pressure on the rapid rise of US bond interest rates will be relieved after April. The current round of valuation adjustment has come to an end. With the upcoming national two sessions and the landing of the boots superimposed on the first interest rate increase by the Federal Reserve, the market risk appetite will be warmed up, and A-Shares are expected to usher in a round of valuation repair.
West China strategy: who will become the rebound pioneer if A-Shares stabilize in the future
There is no need to be overly pessimistic in the future. The conditions for stabilizing A-Shares may be gradually met. 1) At present, the market has fully expected the fed to raise interest rates. It is expected that interest rates will be raised 4-6 times in the year, and the probability of raising interest rates 7 times is also increasing; 2) The overseas policy shift will not restrict China’s monetary policy orientation, and China will still be in a “wide currency” window period in the next 1-2 quarters; 3) Public funds have started the tide of self purchase, while popular fund products have gradually liberalized the purchase restrictions, which is conducive to the inflow of incremental funds into A-Shares and build a “market bottom” of a shares; 4) “Wide credit” is the final demand, infrastructure and real estate are important starting points, and industrial policies such as new energy (vehicles) and digital economy are strongly supported.
Western strategy: looking for opportunities in the “quasi overheating” environment
With the convergence of monetary policies of European and American central banks, the equity market (especially the leader of US stock technology) is gradually returning to the fundamental trading in the earnings season. Coupled with the rise of commodity prices led by oil prices and Shenzhen Agricultural Products Group Co.Ltd(000061) due to the supply shock, the pricing logic of global asset prices began to price the “overheating” of the economy.
With the promotion of China’s policy from wide currency to wide credit, the expected macro environment in the future will be the gradual stabilization and recovery of social finance and the bottom of interest rate shock. From the perspective of financial cycle, we define it as a “quasi overheating” environment. Historically, under the “quasi overheating” environment, the A-share market often presents a wide range of shocks, which is also caused by the mismatch between the numerator side benefiting from the improvement of the credit environment and the denominator side more sensitive to the monetary environment. In terms of structure, the market style of this period is often a gradual switch from high growth to more stable consumption growth; Medium cap stocks with moderate liquidity sensitivity and still flexible earnings are more likely to obtain excess returns.
GF strategy: how to lay out A-share’s good start?
After the A-share Festival, it made a good start and continued to use the idea of low peg to configure the balance between high and low areas. The changes of the three major factors will support the A-share market to make a good start after the festival. In the medium term, A-Shares still face the test of two core contradictions: the Fed’s faster pace of interest rate hike + table contraction; The steady growth effect of China. The performance forecast of the annual report strengthens the growth expectation of low peg technology and some undervalued value. It is suggested to adopt the low peg idea of balanced allocation between high and low areas: 1. The intersection of “steady growth” and “double carbon” in low areas (securities companies, consumer building materials and coal chemical industry); 2. Technology track stocks agreed by PEG (new energy vehicle, power battery and digital economy); 3. Ppi-cpi scissors difference convergence (food processing, agriculture).
CICC strategy: continue to focus on “steady growth” after the A-share Festival
After the festival, considering that the market risk has been released, combined with: 1) various economic data outside China during the Spring Festival, the performance of major overseas markets and Hong Kong stock markets, and the marginal improvement of liquidity after the Spring Festival; 2) The urgency of China’s policy of “steady growth” remains. The economic growth targets announced at the recent two local conferences generally reflect the confidence of local governments; 3) The Chinese and foreign policies and growth cycle are reversed again, and the fluctuation of overseas capital market and the tightening of macro environment highlight the comparative advantage of China’s market; We believe that investors’ risk appetite is expected to improve marginally, and the market may experience “policy bottom”, “sentiment bottom” and “growth bottom” in turn. We believe that the “policy bottom” has been basically confirmed, and the “emotional bottom” may see the strength and rhythm of steady growth policies appear in the near future. The “growth bottom” is also gradually approaching, and China’s overall growth is expected to gradually bottom out and pick up in the first half of the year. Under this background, there is no need to be overly pessimistic about the Chinese market.
