A shares staged a “V” reversal on the second trading day of the year of the tiger, and the Shanghai stock index recovered from the 3400 point mark. Institutional sources said that China’s economic fundamentals are stable and improving, fund issuance is picking up, the valuation of popular track stocks is returning to reasonable, and the release of overseas risks is coming to an end. The four positive factors are converging. We should be optimistic about the future market of A-Shares and look for opportunities in the shock.
substantial net inflow of main funds
On February 8, the three major A-share indexes collectively staged a “V” reversal.
In early trading that day, Yao Ming’s individual stocks and Contemporary Amperex Technology Co.Limited(300750) stock prices fell sharply, and the market sentiment was depressed, dragging down the three major indexes; In the afternoon, the three major indexes made a collective counterattack, the Shanghai index turned red strongly, and the 3400 point mark was lost and recovered.
From the perspective of capital, the sharp net inflow of main funds on that day provided momentum for the reversal.
According to the data, the net inflow of main funds into the whole a index on that day was 12.315 billion yuan; Although the gem index fell deeply, the net outflow of main funds from the index was only 1.794 billion yuan. The banking sector was favored by the main funds, with a net inflow of 4.684 billion yuan; The non bank finance, transportation, architectural decoration and coal sectors ranked top in terms of net capital inflows.
four positive factors converge
In the view of institutional people, the reason for the significant net inflow of main funds is to see the four positive factors converging in the A-share market.
First, China’s economic fundamentals are stable and positive. Gf Securities Co.Ltd(000776) Dai Kang, chief strategist, said that from the Spring Festival holiday to the middle and early March, the intensive implementation of the “steady growth” policy will alleviate the market’s concern about the low thunder and heavy rain of “steady growth”.
Secondly, fund issuance has warmed up. Zhang Qiyao, chief strategist of China Industrial Securities Co.Ltd(601377) said that the cold issuance of funds at the beginning of the year once attracted market attention, but it has warmed up recently. In January, a total of 89.2 billion yuan was issued, returning to the normal level, and the incremental funds in the market are guaranteed. Recently, the self purchase scale of funds has increased significantly. In December 2021, partial equity funds purchased 523 million yuan, a new high since July 2015; Self purchase of 425 million yuan in January 2022.
Thirdly, the valuation of popular track stocks is reasonable. In Zhang Qiyao’s view, the “congestion” of popular tracks represented by new energy, semiconductors and military industry has fallen to a low level, and the pressure on capital position adjustment has been fully released. Chen Guo, chief strategy officer of China Securities Co.Ltd(601066) securities, said that at this stage, the power battery is at the 3-year 37% quantile value, the military industry is at the 3-year 36% quantile value, and the semiconductor is at the 3-year 8% quantile value. This means that the valuations of power batteries, military industry and semiconductors are at a low level in the past three years.
Finally, the release of overseas risks is coming to an end. Dai Kang said that in the short term, the market’s expectation of the Fed’s interest rate increase in 2022 has been fully digested. Even though the January US non farm employment data released before the US stock market on February 4 exceeded expectations and increased the probability and amplitude of the Fed’s interest rate hike in March, the NASDAQ index still rose on the same day. Chen Guo believes that the current stable RMB exchange rate will provide strong support for the independence and flexibility of China’s monetary policy, and there is no need to worry about the impact of peripheral market fluctuations caused by the tightening of the Federal Reserve’s monetary policy.
institutional music watch the aftermarket
Since the beginning of 2022, the A-share market has shown a shock adjustment trend as a whole, “when to counterattack” has become a topic of concern for investors.
“Major stock indexes and industries have been fully adjusted and have a rebound basis.” Chen Guo said. According to Wang Hanfeng, chief strategist of China International Capital Corporation Limited(601995) , the year of the tiger in the A-share market “has no risks, and the opportunities outweigh the risks.” “Steady growth” is a phased main line. The industrial chain related to infrastructure and real estate, the middle and lower reaches of the consumer sector with low adjusted valuation and clear medium and long-term development prospects deserve attention.
Ding Zhenyu, senior investment consultant of Jufeng investment consulting, believes that the gem index is oversold in the short term. It is suggested to pay attention to the high growth stocks with the highest performance on the gem since the market adjustment in the second half of 2021.
Not only Chinese institutions are optimistic about the future market of a shares, but international institutions are also actively increasing Chinese assets.
“This is the right time to invest in Chinese assets.” Wang Ying, chief stock strategist of Morgan Stanley China, suggested paying attention to thematic and structural opportunities of a shares. For example, information security, network security and other fields.
BlackRock emphasized that it is optimistic about Chinese assets in the global investment outlook report 2022. BlackRock believes that the low allocation of Chinese assets by global investors is inconsistent with the growing influence of China’s economy in the world. The agency maintains a long-term over allocation of Chinese assets.
The world’s largest hedge fund, Jinqiao water fund, expressed its optimism about Chinese assets with practical actions. The scale of Chinese funds issued by qiaowater fund overseas continued to expand. According to the documents disclosed in late January, the scale of the fund has exceeded 34 billion yuan, which means that qiaowater fund is adding weight to the distribution of Chinese assets.
