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.
The collapse of high-level group triggered a capital chain reaction, and the peak of market liquidity pressure before Festival has appeared
1) the sudden collapse of the cluster brought about a centralized adjustment and reduction of warehouses, and external negative events aggravated the financial reaction. under the concern of over valuation and fundamental expectations, the collapse of High-level Track stocks at the beginning of the year induced investors to “cut high to low” and reduce positions. At the same time, the hawkish degree of the Federal Reserve’s interest rate meeting in January was much higher than the market expectation. Powell mentioned that there was enough room to raise interest rates and did not rule out the possibility of raising interest rates at each meeting. The interest rate meeting also issued the principle of reducing the size of the balance sheet. Affected by this, the world’s major stock indexes fell resonantly in January, aggravating the cautious mood of Chinese investors. In addition, after the collapse of track stocks in January, a large number of active speculative funds poured into traditional Chinese medicine, covid-19 detection and covid-19 specific drugs. The traditional Chinese medicine index, covid-19 detection index and covid-19 specific drugs index turned down rapidly after reaching their respective highs in mid January, with monthly declines of – 15%, – 9% and – 17% respectively. After the disintegration of the speculation of popular theme stocks, the rapid departure of short-term funds squeezed the market liquidity of small and medium-sized stocks, further led to the rapid withdrawal of quantitative funds and triggered a certain scale of redemption. The centralized liquidation and leverage reduction of quantitative products exacerbated the undifferentiated general decline of small and medium-sized stocks. The national securities 2000 index fell by – 9.3% in the two weeks after January.
2) the effect of reducing positions before the festival leads to the rapid peak of liquidity pressure. It is expected that the signal of stabilizing the market will ferment after the festival. usually, the turnover of A-Shares will shrink by about 20% in the week before the long holiday. The pre holiday effect leads to the lack of willingness of funds to copy the bottom of oversold varieties, aggravating the market liquidity pressure. Take northward trading foreign capital as an example. In the first three weeks of January, large-scale inflows into the stable growth sector represented by finance and traditional cycles, the cumulative net inflow reached 25.4 billion yuan, far exceeding the allocation foreign capital (+ 18.8 billion yuan), but in the last week, trading foreign capital made a significant net outflow of 22.5 billion yuan from the stable growth sector. In fact, a series of stable market signals have appeared before the festival. There is a “self purchase tide” in public funds. The planned self purchase scale in a single month has reached 1.975 billion yuan, which is higher than that in March last year (410 million yuan per month). We estimate that the planned self purchase amount in January alone will account for about 3 ~ 4% of the total profit scale in 2021, reaching the average level in 2017 ~ 2020. At the same time, the star fund manager is released from the purchase, and the purchase of large amount of funds is re quantified. A series of stable market signals were ignored due to the effect of reducing positions before the festival, but fermentation is expected to begin after the festival. In addition, major overseas indexes rebounded sharply during the Spring Festival, or driven the early hedge funds to cover their positions after the festival.
The credit inflection point of still needs time to be verified. There are many highlights in the annual report forecast . At present, it is the bottom of fundamental expectations
1) the combination of steady growth policies is on the way, and the economy may develop in the first quarter or in the future. it is only a matter of time before the steady growth policy forms a joint force. On February 5, the national development and Reform Commission once again stressed that the focus of macro-control should focus on “stability”, strengthen the overall planning and coordination of policies, form a joint force for steady growth, and the force of policies should be appropriately advanced. In early January, China’s overall credit supply was not ideal, which once triggered the market’s concern about steady growth. However, after the central bank stressed to avoid “credit collapse” in mid January, according to the high-frequency research of the banking group of Citic Securities Company Limited(600030) research department, there were signs of strength in credit supply in late January, The gradual rise of the rediscount rate of bank acceptance bills in the bill market also reflects the marginal improvement of the relationship between supply and demand in the credit market. The macro group of Citic Securities Company Limited(600030) Research Department predicts that the approximate rate of new RMB loans in January 2022 will maintain a positive growth compared with 3.6 trillion in the same period last year, and is expected to reach about 3.9 trillion. Considering the significant year-on-year increase in the number of people returning home during the Spring Festival this year, the rework after the festival is expected to bring obvious month on month improvement in industrial production; In addition, if the scattered epidemic in the second quarter is further controlled as expected, the operation of accurate epidemic prevention and control will be more common, and the negative impact of the epidemic on the service industry and consumption is expected to be gradually alleviated. On the whole, the economy may show obvious characteristics of late development in the first quarter.
2) the epidemic damaged sector fell to the ground, and the leading performance forecast in the field of new energy exceeded expectations. according to the forecast of the annual report, the huge losses in the epidemic damaged sectors such as retail indicate that the bad has basically landed. The market’s previous expectations for the growth of listed companies were significantly high, but based on the predicted net profit at the beginning of the year, only 31% of the companies that have disclosed the performance forecast met the expectations. All the sample enterprises that disclosed the performance forecast increased or decreased by – 0.6% on the day after the release of the forecast, and the excess return rate relative to CSI 800 was + 0.1%. On the whole, with the end of the centralized disclosure period of performance forecast, the problem of investors’ high expectation of fundamentals has been digested in this round of decline. But at the same time, it can be seen that the relevant sectors of new energy still show the characteristics of exceeding expectations. The average rise and fall of new energy track companies including electric vehicle, photovoltaic and wind power industries on the next day of performance forecast disclosure is + 0.3%, compared with the average excess return of CSI 800 index is + 1.3%, which is significantly better than all sample companies. The investment in new energy related equipment continued to maintain a high boom. The installed capacity of household photovoltaic in December exceeded expectations. The guidelines for offshore wind power installed capacity disclosed in January maintained a high compound growth, and the relevant industry indexes also bottomed out in advance in the middle of the month.
the effect of the long holiday superimposed overseas risk concerns. Before the festival, there was an excessive release of risk concentration, and the bottom of sentiment has also appeared
1) with the digestion of forced sales and the rise of passive product subscription, the market liquidity risk has been fully released.
the sharp decline of small cap stocks in late January showed that there were a large number of forced sales in the market. The national securities 2000, China Securities 500 and Shanghai and Shenzhen 300 fell by – 11.1%, – 10.6% and – 7.6% respectively in the whole month. The decline of small cap stocks lacking futures index hedging tools was significantly greater in late January. The basis change of CSI 300 and CSI 500 index futures also reflects the passive position closing and leverage reduction of quantitative products due to withdrawal. In mid January, CSI 300 and CSI 500 futures once had a relatively spot premium. However, in the last week of January, the futures index basis fell rapidly and the number of insurance policies began to increase, indicating that the pressure of forced spot sales has been significantly relieved. All kinds of ETFs also received net subscription funds for bargain hunting in January. Wide base, cycle, consumer, pharmaceutical, TMT and financial ETFs accumulated net subscription funds of 22.4 billion yuan, 9.9 billion yuan, 3.8 billion yuan, 6.1 billion yuan, 6.7 billion yuan and 7.1 billion yuan in January this year. It is rare for all categories of ETFs to make net subscription at the same time. Four MSCI China A-share interconnection ETFs accumulated a net inflow of 1.7 billion yuan in January, The share of stock products also returned to near the peak in November last year.
2) China’s credit risk has been mitigated, and the emotional impact of overseas currency tightening has passed the peak. credit risk disposal in China’s real estate sector has been on track. With the continuous improvement of policy support for market-oriented M & A, relevant real estate enterprises actively save themselves, and the risk of concentrated default of real estate developers is declining. Since December last year, the credit spread of offshore Chinese dollar bonds has begun to converge significantly, and attracted a large amount of funds to flow into relevant ETFs. By the end of January, the net assets of iShares Asian high-yield Bond ETF had reached US $2.5 billion, 10 times the scale before the outbreak of credit risk, and the share increased by 36% month on month compared with December. The tightening expectation of overseas currencies has passed the peak stage by stage. Overseas investors have fully predicted the operation idea of the Federal Reserve at least in the first half of the year, and the implied probability of raising interest rates five times has also soared to 27.4%. Historically, the actual number of interest rate increases by the Federal Reserve is much lower than the implied number of interest rate increases announced in the “dot matrix” of the interest rate meeting. The overseas strategy group of Citic Securities Company Limited(600030) research department believes that the Fed has achieved the goal of controlling inflation expectations in stages, and there is probably no more hawkish expression than market expectations.
3) various market sentiment indicators are close to the extreme point, and the release of investors’ panic is coming to an end. according to the investigation of Citic Securities Company Limited(600030) channels, the position of small and medium-sized private placement products in the last week before the Spring Festival continued the downward trend of the previous week, and has now fallen to less than 75%. The “market temperature index” calculated based on the degree of speculation of various broad-based indexes also decreased significantly in January. At the end of January, the corresponding temperature indexes of Shanghai Stock Exchange 50, Shanghai and Shenzhen 300, China Stock Exchange 500, gem index and China Stock Exchange 1000 were at the quantiles of 53%, 47%, 2%, 9% and 35% since 2018 respectively. The trading heat of some indexes has fallen to the level at the end of 2018. According to the investor sentiment index calculated by the quantitative allocation group of Citic Securities Company Limited(600030) research department, the degree of investor risk appetite reflected by CSI 300, CSI 500 and gem index has declined rapidly since December last year. At present, the investor risk appetite corresponding to the above three indexes is located at the quantile of 9.8%, 10.1% and 36.6% since 2019, respectively, and at the “trough” in the past four months, It indicates that market sentiment has reached a low level.
double bottom resonance, actively layout around two low positions to meet the starting point of the market
The “policy bottom” has been made clear, the steady growth policy is forming a joint force, the emotional release brought by the release of high-level holding stocks is coming to an end, and the “emotional bottom” has appeared before the festival. We expect that as investors’ confidence in steady growth policies and economic stabilization continues to strengthen, the consensus on the main line of steady growth will continue to improve, and their confidence and sentiment in the market will also be boosted. With the steady return of net capital inflow, the “market bottom” is gradually approaching. We suggest that we continue to follow the main line of “steady growth” and actively layout high-quality blue chips around the “two low positions”, including: 1) varieties with relatively low fundamental expectations, focusing on midstream manufacturing suppressed by cost problems in the early stage, such as automobile , photovoltaic wind power equipment , Airlines and hotels whose fundamentals are expected to remain low; 2) For the varieties whose valuation is still relatively low, it is recommended to pay attention to high-quality developers , building materials and household enterprises after the expected mitigation of real estate credit risk, Hong Kong stock Internet leaders after experiencing the impact of China stock market, and fine chemical enterprises with the ability to develop new businesses such as new materials.
risk factors
Global epidemic recurrence; The friction between China and the United States in the field of science and technology trade has intensified; The progress of China’s economic recovery is less than expected; Macro liquidity at home and abroad tightened more than expected.
