A shares made their debut in the year of the tiger, and the much anticipated start came as scheduled. Today, the two cities continued to rise after opening high. By the end of the afternoon, the Shanghai index rose 2.03%, the Shenzhen Composite Index rose 0.96% and the gem index rose 0.31%. Stocks in the two cities rose more and fell less, of which 3509 stocks turned red and 1126 stocks fell. In addition, 105 stocks rose by more than 10% and 41 stocks fell by more than 10%.
From the data, the market basically shows a general upward pattern. It seems that most people have received red envelopes for the beginning of the year, but many investors lament that they are losing money at the beginning of the year. The main reason is that the sharp pull of important stocks such as PetroChina contributed to the rise of the index.
For this year’s market performance, a number of fund companies issued comments. They generally believe that the rebound in market sentiment, coupled with the rise in commodity prices, drives the cycle of agitation, and the market rebound arrives as scheduled. After the decline of the A-share market before the Spring Festival, the risk has been released, and the space to continue to decline in the future is limited. There is no need to be too pessimistic about the subsequent performance of the A-share market. The main line of steady growth and scientific and technological growth deserves attention.
market sentiment rebounded, commodity prices rose, etc.
rebound due to multiple positive factors
In the view of fund companies, today’s A-share year of the tiger has made a good start, which is the result of the joint action of various favorable factors such as domestic and foreign capital, gold and news.
Huaxia Fund said that on the first trading day of the year of the tiger, the three indexes opened higher collectively, and the trend was divided in the afternoon. Many sectors such as oil and gas exploitation, water conservancy and coal concept continued to be active. The building decoration sector raised the limit tide, while the communication service and education sectors were depressed throughout the day. The covid-19 treatment sector led the decline, with more than 100 limit stocks, the market theme stocks generally rose, and the profit-making effect was strong. The net purchase of northbound funds throughout the day reached 5.552 billion.
In the pre holiday micro strategy, Huaxia Fund judged that the market adjustment was mainly due to the decline of risk appetite. The disturbing factors came from the expected impact of US interest rate hike, the continuous rise of US bond yield, and the superposition of geopolitical and other risk events. It believed that the volatility probability of the index decreased after the holiday, which is expected to rebound gradually with the repair of risk appetite.
Wanjia fund commented that today’s market opened higher and rose in an all-round way. The Shanghai Composite Index rose 2.03%, the China Securities 500 rose 1.46%, and the Shanghai and Shenzhen 300 rose 1.54%. The turnover of the two markets was about 0.82 trillion yuan, the same as that of the previous trading day. In terms of style, steady growth, good cycle performance, poor growth and consumption performance; By industry, the top performers are: Construction (5.63%), petroleum and Petrochemical (4.59%), coal (4.19%); The performance is relatively low: Food and beverage (- 0.2%), national defense and military industry (- 0.23%), and media (- 0.45%).
Today, the market opened higher and rose in an all-round way. According to the analysis of Wanjia fund, the main reasons are as follows: first, most global stock markets performed strongly during the Chinese New Year holiday, driving the rise of a shares. During the Spring Festival, most overseas markets rose, with the Hang Seng index rising 4.3%, the Korean composite index rising 3.3% and the Nikkei 225 rising 2.7%. US stocks stabilized and rebounded, and the standard 500, Dow and Nasdaq rose 1.5%, 1.0% and 2.4%, boosting the sentiment of the A-share market.
Second, the North reversed the sharp net selling trend before the festival and bought a net 5.552 billion yuan today, boosting the sentiment of a shares. Today, northbound funds bought a net 5.552 billion yuan throughout the day, including 6.628 billion yuan for Shanghai Stock connect and 1.076 billion yuan for Shenzhen Stock connect, reversing the net outflow of nearly 30 billion yuan in the week before the festival.
Third, the sharp rise in oil prices has led the rise of traditional sectors such as petroleum and petrochemical. Affected by the geographical conflict and cold weather, the tight oil supply side boosted the crude oil price, the oil distribution exceeded the 90 mark, and the international oil price hit a new high in more than seven years. Commodity and futures prices rose sharply, driving today’s rise in the petroleum and petrochemical sector. At the same time, the national development and Reform Commission stated that it would appropriately move forward the policy force point, appropriately carry out infrastructure investment in advance, drive the sharp rise of cyclical stocks such as construction, steel, coal and nonferrous metals, and boost the sentiment of a shares.
The Great Wall Fund believes that on the first day of the year of the tiger, the tiger occupies the dragon’s land, and the present wins the past. A brief review of the performance of the peripheral markets during the Spring Festival and the memorabilia of events in China will find that the momentum of today’s A-Shares is like a rainbow, which is not a surprise. Before the festival, the market sentiment was relatively depressed, and the index continued to fluctuate downward. This adjustment is basically due to various external factors, such as the reduced willingness and emotional sensitivity of capital admission before the festival, the hawkish remarks of the Federal Reserve, the black swan incident and so on.
In the view of Great Wall Fund, the peripheral market performance of the Spring Festival can be summarized as that the global market looks at the Asia Pacific and the Asia Pacific market looks at Hong Kong stocks. The Hong Kong stock market took the lead in ushering in the first trading day of the year of the tiger on February 4. On that day, the Hang Seng Index closed up 3.24% and rose 4.34% in the whole Spring Festival, sweeping away the downturn of last year. The transformation of Hong Kong stocks has also brought enlightenment to a shares: the strength of bottom reversal can not be underestimated. After walking out of the cold winter of emotion, policy and market, the market is full of spring. The European and American markets generally rose during the holidays, but it was restrained to some extent, mainly due to the implementation of the interest rate increase by the Bank of England, the hawkish statement of the Federal Reserve and the continuous emergence of inflationary pressure in Europe and America.
The Bank of England is the first central bank in Europe and the United States to take practical actions to combat inflation. In this context, the market has expected the tightening pressure of global liquidity. Under the background of global economic contraction and increasing uncertainty of overseas environment, the loose and stable internal of A-Shares makes its comparative advantage more and more significant.
Generally speaking, the Great Wall Fund said that today’s A-share market opened at a happy start, due to the favorable conditions of time, place and people. Whether it is the environmental foundation of external tightness and internal looseness, or the full accumulation of energy after the bottom of emotion and fundamentals, it may indicate that all the starting conditions of the market in the first quarter are in place.
Boshi fund commented that during the Spring Festival, the overseas market strengthened as a whole. Catalyzed by this, A-Shares also ushered in the year of the tiger today. The Shanghai index rose by more than 2%, more than 3500 stocks rose, and the trend of large infrastructure sector was strong.
On the news, Boshi Fund said that in order to expand effective investment and stabilize the macro-economic market, all localities are successively printing and distributing the list of major projects in 2022. According to statistics, as of February 6, eight provinces and cities, including Shandong, Beijing, Hebei, Jiangsu, Shanghai, Guangdong, Zhejiang and Sichuan, have issued investment lists of major projects in 2022, with a total of 6501 projects, with a total investment of at least 15.6 trillion yuan. And the relevant person in charge of the national development and Reform Commission also said recently that infrastructure investment should be carried out moderately in advance. Boosted by these, the trend of large infrastructure sector is strong today.
Boshi fund also said that the Ministry of industry and information technology and other three departments issued the guiding opinions on promoting the high-quality development of the iron and steel industry, which made it clear that by 2025, the iron and steel industry will basically form a high-quality development pattern with reasonable layout and structure, stable resource supply, advanced technology and equipment, prominent quality brand, high intelligence level, strong global competitiveness, green, low-carbon and sustainable development. New steel production capacity is strictly prohibited. We will resolutely curb the blind construction of iron and steel smelting projects, and shall not increase iron and steel production capacity in the name of machining, casting, ferroalloy, etc. Affected by this, the steel sector rose sharply today.
The PMI of Caixin China’s service industry in January announced today recorded 51.4, down 1.7 percentage points from the previous month, indicating a slight expansion of service industry activities, but the growth rate slowed to the lowest in nearly five months. Enterprises generally reflect that the expansion of business activities is due to the increase of new business volume, but the epidemic situation and corresponding epidemic prevention measures restrict the overall growth rate.
The previously announced manufacturing PMI of Caixin China fell 1.8 percentage points to 49.1 in January 2022, the lowest since March 2020. This trend is consistent with the National Bureau of statistics.
YONGYING Fund said that during the Spring Festival, the overseas market rebounded and China’s steady growth market continued to perform. First of all, during the holiday period, the US non farm payrolls data in January was good, and Brent oil price exceeded $90, boosting the 10-year US bond interest rate to exceed 1.9%; At the same time, the Bank of England announced a 25bp interest rate increase and started a passive table contraction. The expectation of liquidity contraction is still strong.
The global equity market sentiment represented by US stocks has eased, and there are signs of negative passivation after experiencing the obvious liquidity impact since January. Second, China’s equity market has released downside risks to a large extent before the festival, and there is generally a return effect after the Spring Festival. Under the background of downward pressure on the economy, the steady growth policy in February deserves attention.
The periodic rebound space of index still exists
Looking forward to the future, fund companies generally believe that the periodic rebound space of the index still exists, and the macroeconomic environment has laid a solid foundation for A-Shares to show their strength next.
YONGYING fund judged that the future market patiently waited for China’s further easing policies, and the sectors with stable growth as the main line deserve attention. Overseas, the next fed interest rate meeting is in late March. Considering that the US economic data may weaken in February, the monetary tightening is expected to ease moderately. In China, under the downward pressure of China’s economy, the policy probability will continue to be loose.
In terms of coping strategies, YONGYING Fund said that 1) from the perspective of half a year, the main line of steady growth is more deterministic, such as real estate chain, infrastructure chain and financial chain. The valuation of relevant sectors is low, which is also in line with the phased support direction of the policy. We need to wait for the data verification signal after the policy is launched, and pay attention to the high-frequency data such as social finance data in January, commencement after the festival, land transaction, commercial housing sales and so on. 2) If the monetary easing signal appears after the Spring Festival, the growth style may usher in a phased rebound. However, it should be noted that in mid and late March, if the Fed starts the interest rate hike cycle, the global risk asset prices may be affected again.
YONGYING fund suggests that the following factors need to be paid attention to in the near future: 1) the progress of the Federal Reserve’s interest rate increase or even table contraction; 2) The rhythm of China’s monetary easing and fiscal advance; 3) Observe China’s industrial policies, including the promotion progress of new energy, real estate financing policies, real estate tax and consumption tax.
A public offering company in Shanghai also believes that the market can still be more optimistic for the first half of the year. The core factor driving the market to warm up in the future is not only the recovery of risk appetite, but more importantly, the market is returning to fundamental trading. With the return of overseas markets to fundamental trading during the Spring Festival, superimposed A-Shares have gradually entered the window period of annual report and first quarter report, especially for the boom track with high performance cashing degree, it can still be more optimistic.
Xie Yi, fund manager of Nord fund, analyzed that from the perspective of economic fundamentals, the data released during the Spring Festival showed that China and foreign countries have slowed down, but its cycle position and meaning are completely opposite. According to the data released by the United States, its data value (if only looking at PMI) fell from around 60 to about 57, peaking and the downward trend is obvious.
\u3000\u3000 “On the one hand, this comes from the cyclical decline of its economic momentum, and the expectation of the Fed’s interest rate hike is also accelerating this process. On the other hand, the PMI value of China has bottomed again from around 50 to 49. This is the new low of this round of decline cycle since the end of 2020, and it is also the bottom of high probability. It may take another year for the US economy to reach the bottom, and several interest rate hikes can be added It will be faster, but the decline should be the state of the U.S. economy for most of 2022. China’s economy may have reached the bottom first. This decline may also have some seasonal factors and some disturbances in Q4 in 2021. But the probability of subsequent economic rise will be significantly higher than the probability of continued decline. ” Xie Yi said.
Wanjia Fund said that it will continue to be optimistic about the investment value of high-quality A-share assets for a long time. In January, the Fed’s interest rate meeting exceeded the expectations of hawks, and the process of interest rate increase and table contraction may be further accelerated. Europe took over and turned to hawks, strengthened the expectation of “inflation tightening”, and tightened the peripheral markets.
However, from the perspective of China, the central economic work conference Revisited “focusing on economic construction”, and the demand for steady growth has increased significantly. The interest rate of the central bank’s MLF and reverse repurchase policy has been cut by 10bp more than expected. The one-year LPR and five-year LPR have been “double reduced” again, which is basically in line with expectations. The monetary policy has been further relaxed, and the social finance growth rate continued to rise slightly in December. With steady growth, Subsequent credit is expected to gradually stabilize. In terms of the capital market, foreign capital continued to enter the market and the reform of the capital market continued to deepen.
Great Wall Fund also suggested that after the periodic ebb tide of investment caused by events, emotions, calendar effects and other factors, it is easier to find that the most important fundamentals and policies for the A-share market are stable. The earnings season begins, and there are many highlights in the annual report forecast of listed companies. After the long performance vacuum period, there is no doubt about the driving force of the good news of fundamentals on individual stocks.
On February 1, the director of the National Bureau of statistics published an article entitled “increasing the quantity and quality of the national economy and achieving a good start in the 14th five year plan”, emphasizing the need to make steady progress, overcome difficulties and make steady progress. The national development and Reform Commission also said a few days ago that the current macro-control should focus on stability, speed up the introduction of a series of policies and measures to implement the strategy of expanding domestic demand, and moderately advance infrastructure investment. The continuous release of the steady growth signal not only pointed out the direction for the market in the year of the tiger, but also brought a full sense of security to the market.
From the perspective of liquidity, Great Wall Fund said that although the volume of 130 billion returned funds today is large, the large-scale cash return has greatly increased the total liquidity of the banking system. The maturity of national bonds in the first week after the festival is large, which increases the liquidity. The overall capital after the festival is wide but not loose. Overall, the macroeconomic environment has laid a solid foundation for A-Shares to show their strength next.
In Boshi fund’s view, the central bank’s early policies show that China’s monetary easing cycle will continue, liquidity will remain reasonably abundant, and various steady growth policies are also hedging the negative impact of overseas liquidity tightening. It is expected that the follow-up steady growth policies will continue to work, and China’s macroeconomic steady and good trend has not changed.
the main line of steady growth and scientific and technological growth deserves attention
For future investment opportunities, the fund company believes that steady growth is still an important investment line in the first quarter, and the science and technology growth track is expected to continue to perform.
In the process of market rebound, Huaxia Fund suggests paying attention to three directions: ① the main line of steady growth (real estate and infrastructure related industrial chain); ② Technological growth (Xinchuang, cloud computing, etc.); ③ New energy (new energy vehicles, solar energy storage, power grid, etc.).
Boshi Fund believes that the risk of the A-share market has been released after the decline before the Spring Festival. Therefore, Boshi Fund believes that there is limited room to continue to decline in the future, and there is no need to be too pessimistic about the subsequent performance of the A-share market. With the support of economic fundamentals and liquidity, there are still many structural opportunities in the future, and the sectors benefiting from policy support will be more favored by funds, Such as new and old infrastructure industry chain.
From the stock market level, Xie Yi, fund manager of Nord fund, said that seeing the performance of some short-term cycle sectors, the market may have expectations for fiscal policy or further monetary policy. However, we believe that even without additional policies, the economy will gradually recover, and all mainstream sectors (not just cycles) will benefit, including consumption, technology and Hong Kong stocks. In particular, in terms of Hong Kong stocks, we can see that the index level has significantly outperformed the global mainstream market since this year, and its cost performance is higher. On the one hand, more importantly, the expectation of China’s economic recovery makes the fundamentals of Hong Kong stocks stronger than those of US stocks.
A shares, Xie Yi believes that its fundamentals are basically the same as those of Hong Kong stocks, and all follow China’s economy. The only difference is that Hong Kong stocks have experienced a bubble in 2021 and have relatively low valuations. However, after the adjustment since the beginning of the year, we believe that A-Shares as a whole also gradually show high valuation advantages. Superimposed on their fundamentals, the probability will be reflected in the subsequent market. In terms of consumption, we believe that with the recession of the subsequent epidemic and the superposition of cyclical economic recovery, consumer spending will be gradually restored no matter whether residents consume or business activities. The track that is reasonably valued and sustained in earnings growth in the large consumption sector is expected to continue to show that Baijiu, consumer building materials and consumer electronics are worth looking forward to.
In the fourth quarter of 2021, CAITONG fund made a large-scale adjustment to its position portfolio, withdrew from the large cycle track adhered to in the previous three quarters, made a large-scale reduction in the pro cycle industries such as chemical industry, significantly increased the allocation of agriculture, forestry, animal husbandry and fishery industries, and slightly increased the allocation of aviation, hotel, food and other industries. It can be seen that such position adjustment action is relatively large, and several additional industries represent our promising industries in 2022.
Looking forward to the future, Shen Li, fund manager of CAITONG fund, said that he is full of confidence in 2022, and the general direction and tone of recovery will not change. It is expected that the growth rate of total retail sales of social consumer goods may recover to a certain level this year.
Specific to the segments, Shen Li believes that the pig cycle may have clearly hit the bottom. Although there are differences in the space for subsequent price rise, some high-quality companies are significantly ahead of their peers in terms of capital strength and production capacity, with large development space and rapid growth in the future. In addition, an important reason for the downturn in pig prices this year is not only excess supply, but also insufficient demand. The epidemic has limited the demand for medium and low-end consumption and catering. If the consumption environment stabilizes next year, the recovery of demand may be one of the factors that the pig cycle exceeds expectations.
For the mandatory consumption sector, Shen Li believes that it still has investment value at present. In the second half of 2021, the background of the macroeconomic slowdown accelerated, the high-end Baijiu still maintained a certain growth, showing good toughness, and at the end of the year, all companies are actively raising prices, this year is expected or can achieve steady growth.
In addition, Shen Li said, “the real estate industry chain has obviously declined due to macro-control, but there has been a bottom-up signal on the policy side, and some advantageous regions have warmed up recently. We believe that there is a lot of room to improve the upstream and downstream concentration of many real estate chains, and we may pay attention to individual stocks with obvious competitive advantages.”
