Yesterday, the gem index experienced a more violent shock. Dragged down by the two heavyweight sectors of medicine, biology and new energy, the gem index once fell more than 4% in early trading. In the afternoon, the capital sentiment gradually stabilized, and the gem index closed down to 2.45%.
Gem refers to the unsatisfactory performance in the past two months, with a cumulative pullback of nearly 20% at a higher point. The reason is that external factors frequently disturb the sentiment of capital trading, and the potential capital structure problems also make the hot sectors encounter greater selling pressure in the early stage.
Looking forward to the future, institutions generally believe that China’s stable monetary policy and reasonable and abundant liquidity will drive the capital market to return to the rhythm of “focusing on me”; Referring to the history of A-share market, the short-term adjustment range of gem index and other major indexes has been relatively sufficient, and the subsequent downward space may be small; The fundamentals of growth tracks such as new energy are safe, and the short-term sharp decline may bring buying points.
disturbed by the news, A-Shares will return to the rhythm of “focusing on me”
Yesterday, the gem’s intraday adjustment was once again related to external news factors.
In early trading yesterday, the CXO sector fell sharply, and the industry leader Wuxi Apptec Co.Ltd(603259) hit the limit shortly after opening. Heavyweights Pharmaron Beijing Co.Ltd(300759) , Hangzhou Tigermed Consulting Co.Ltd(300347) on the gem also followed up and fell, and the trading atmosphere of growth stocks fell to a low point.
On the news side, some media reported that the two subsidiaries of YaoMing biology were included in the “unconfirmed list” by the U.S. Department of Commerce. At noon yesterday, Wuxi Apptec Co.Ltd(603259) announced that the production and operation of the company were normal, the company and its subsidiaries were not included in the so-called “list”, and the company did not hold any shares in Yaoming biology. After the clarification announcement was released, the financial worries eased, and the decline of the pharmaceutical and biological sector narrowed in the afternoon. However, another gem heavyweight Contemporary Amperex Technology Co.Limited(300750) was still dragged down, with an intraday decline of nearly 10% and a closing decline of 6.66%.
Similar situations have occurred many times recently. Since the end of 2021, the rise of US bond interest rate, panic in peripheral markets, geopolitical tension and other external factors have occurred frequently, which is regarded as one of the “incentives” for funds to sell stocks.
However, since the global covid-19 outbreak, the pace of the Chinese and foreign economic cycle has shown obvious dislocation. In this context, the different liquidity environment makes the actual impact of external factors on A-Shares more limited.
Mingming, chief ficc analyst of Citic Securities Company Limited(600030) research department, said that the dislocation of China US monetary policy cycle led to the narrowing of China US interest rate spread, but did not lead to capital outflow, mainly because China’s economic growth toughness is strong. At the same time, China’s financial market continues to expand its opening to the outside world and continues to attract capital inflows.
Qin Peijing, chief strategist of Citic Securities Company Limited(600030) also believes that the impact of overseas market risks on China is limited to the emotional side, and the trend of global capital allocation of A-Shares is still clear.
China Industrial Securities Co.Ltd(601377) Zhang Yidong, the world’s chief strategic analyst, has also emphasized the concept of “focusing on me” for many times. In his view, overseas turmoil does not pose a major risk to the Chinese market, and A-Shares are more “self dominated”. The investment clock is expected to “recover” in 2022, the RMB exchange rate remains stable, and A-Shares have better allocation and cost performance than overseas stock markets.
fundamentals are growing and track performance continues to deliver
Recently, some of last year’s popular growth stocks retreated from high positions, and the growth style continued to be weaker than the value style, leading to the decline of broad-based indexes with higher scientific and technological innovation content, such as the gem index and the science and innovation 50 index. For the reasons for the centralized correction of popular stocks, some insiders believe that it may be related to the internal capital structure.
Li Bei, founder of Banxia investment, said yesterday that most of the positions of China’s securities private equity funds are concentrated in the industry and style allocation, especially in the hot sectors with outstanding early performance. The concentration of shareholding superimposed with the requirements of absolute return and the objective constraints of stop loss line make this part of private equity funds have much less ability to withstand fluctuations than public offering.
Li Bei believes that the scale of private equity funds increased significantly in 2021, which exacerbated the “vulnerability” of the market, especially the varieties with high proportion of private equity. In contrast, the value stocks represented by the large financial sector (such as the constituent stocks of Shanghai Stock Exchange 50 Index), due to the relatively light private placement positions, have a relatively strong performance under the background of the disturbance of this round of external factors.
However, with the decline in the valuation of growth stocks, the capital factor will eventually give way to the fundamentals. From the current situation, the prosperity of most growth tracks is still good, and the performance of growth stocks continues to be realized.
Take the new energy sector as an example. In terms of news, after the production and sales data in 2021 exceeded expectations, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles continued to increase significantly in mid January 2022. Byd Company Limited(002594) the sales volume of new energy vehicles in January was 93200, a year-on-year increase of 362%; The sales volume or delivery volume of Xiaopeng automobile and ideal one model in January doubled year-on-year.
Reflected in the performance of listed companies, the overall performance of gem is better than that of the main board. According to the data, as of February 6, among the 713 GEM companies that have disclosed the performance forecast for 2021, the average net profit increased by more than 61.65% year-on-year, significantly higher than that of the main board. Among them, high-end manufacturing, green low-carbon and “specialized and special new” varieties have achieved outstanding performance.
According to Chen Guo, chief strategist of China Securities Co.Ltd(601066) , in the past few years, the sharp decline in the market due to passive position reduction caused by non fundamental factors is not a “selling point” but a “buying point” in hindsight. At present, some high-quality growth stocks are still supported by fundamentals, and the valuation contraction is expected to come to an end. With the subsequent performance disclosure, there will be a counterattack after further verification of fundamentals.
the technical oversold market is expected to “go from winter to spring”
Recently, there is a market view that the gem index has entered the so-called “technical bear market” (that is, the index has retreated more than 20% from the recent high). But looking back on the past, whether it is the long bull market in the A-share market in recent three years or the performance of peripheral markets in recent years, “technical bear market” has been mentioned many times, but it has never shown the real opening of the bear market.
For example, at the beginning of March 2021, the gem index retreated more than 20% from its high level, which was regarded by some investors as entering a “technical bear market”, but the subsequent market immediately stopped falling and stabilized, and the index reached a new high in just more than three months; As another example, in the first quarter of 2020, affected by the epidemic, many overseas stock markets entered a “technical bear market”, but it did not hinder subsequent record highs. Therefore, this technical index is not effective in the market in recent years, and can even be regarded as the arrival of the inflection point of the market.
Yan Xiang, chief strategic analyst of Founder Securities Co.Ltd(601901) has made statistics before. Since 2010, the gem index has experienced 17 short-term significant pullbacks. In the previous 16 times, the average pullback range of gem is about 22%, and the average pullback days are about 30 days.
Since the peak on December 15, 2021, the gem index has retreated nearly 20% from the high point, and the interval trading days are 34 trading days. In terms of the magnitude and duration of the decline, it has approached or reached the average level of previous adjustments.
Qin Peijing also said that with the continuous digestion of passive selling, the market liquidity risk has been fully released, the emotional impact of currency tightening in some major overseas economies has passed the peak, and all kinds of market sentiment indicators are close to the extreme point. The “policy bottom” of A-Shares has long been clear. Under the resonance of the current “emotional bottom” and “market bottom”, the market overshoot will bring a better time point for the layout in the first half of the year.
