Foreign media headlines sing more about China’s stock market!
today, A-Shares performed well, and it was warm outside. The front page of the well-known American media CNBC published an article entitled “from Credit Suisse to Goldman Sachs, investment banks say it’s time to buy Chinese stocks”. The article points out that Goldman Sachs, Credit Suisse and other five major international banks collectively look more at China.
At the same time, the official wechat of the financial times hosted by the central bank released a headline saying that the weighted average interest rate of enterprise loans in 2021 was 4.61%. According to the report on the implementation of China’s monetary policy in the fourth quarter of 2021 issued by the people’s Bank of China, this is also the lowest level of the data in more than 40 years of reform and opening up. With the support of popularity outside and the help of interest rate inside, can the market catch fire?
Analysts believe that the recent market sentiment is indeed recovering, and all aspects of market data are also improving. This trend should continue for several trading days. However, some uncertainties still exist. Expectations of interest rate hikes in the United States and the European crisis still exist, and the epidemic in Hong Kong has rushed into a hot search. Further observation may be needed in the follow-up.
front page headline: five major banks collectively sing more Chinese stocks
today, an article entitled “from Credit Suisse to Goldman Sachs, investment banks say it’s time to buy Chinese stocks” was published on the front page of CNBC, a well-known media.
The article points out that more and more international investment analysts say that it is time to buy stocks in Chinese mainland before the government’s expectation of economic growth.
In its 2022 global equity strategy report, Credit Suisse upgraded China’s rating to “overweight”, reversing the downgrade of about 12 months ago. “Monetary policy is easing [in China] and tightening elsewhere,” Andrew gaswaite, its global strategist, and his team wrote in a report in late January “The economic momentum is improving.” In another sign of optimism, the emerging markets strategy team said in January that its most confident stock concept included many Chinese Internet companies such as Alibaba.
One of the early positive turning points for Chinese stocks came from the appeal made by BlackRock Investment Institute in late September last year. With the advent of 2022, other institutions have made similar voices.
In January, Bernstein released a 172 page report entitled “Chinese stocks: no longer ‘non investable’.”. “We believe there are six key reasons to increase China’s exposure to global portfolios,” said an analyst at the investment research company They point out that expectations for new financing, looser monetary policy and more attractive stock valuations have increased relative to the rest of the world. Other factors include rare stock selection opportunities, increased foreign capital inflows and increased earnings.
“Investors are too pessimistic about Chinese stocks,” HSBC analysts wrote in a report on February 7, which confirmed their call to upgrade Chinese stocks to overweight in October.
“Yes, China is trying to cope with growth, and a stronger dollar is not good news for China’s stock market.” Analysts said. “But this is well known and has been price in. The valuation of blue chips is very attractive now.” Analysts at the bank predict that the Shanghai Composite Index will rise 9.2% and the Shenzhen Component Index will rise 15.6% this year.
In a report on January 23, Roger Lau, chief China equity strategist of Goldman Sachs, said that Goldman Sachs expects the MSCI China Index to rise 16% this year because the valuation is still lower than the price earnings ratio target of 14.5 of Wall Street banks.
On Sunday, his team released an 89 page report on “why Chinese A shares have become more suitable for global investors”. Their reasons for investing in the world’s second-largest stock market are mainly based on the easier access of foreign investors and the insufficient allocation of positions in stock categories so far.
big positive: the key interest rate fell to the lowest level in 40 years
the official wechat of the financial times hosted by the central bank also released heavy benefits: the weighted average interest rate of enterprise loans in 2021 was 4.61%, the lowest level in more than 40 years of reform and opening up.
The report pointed out that in December 2021, the people’s Bank of China lowered the interest rate of small-scale refinancing for agricultural support by 0.25 percentage points, and the quoted interest rate (LPR) of one-year loan market decreased by 5 basis points in that month, which promoted the further decline of real loan interest rate on the basis of the sharp decline in 2020. In December, the weighted average interest rate of loans was 4.76%, down 0.27 percentage points year-on-year. The weighted average interest rate of corporate loans was 4.57%, down 0.04 percentage points year-on-year. The annual enterprise loan interest rate in 2021 was 4.61%, the lowest level in more than 40 years of reform and opening up. This is the result of the steady progress of many reforms over the years, including the market-oriented reform of interest rates.
The central bank said that in the next stage, it will continue to improve the formation and transmission mechanism of market-oriented interest rates, give play to the efficiency of the reform of quoted interest rates in the loan market, stabilize the cost of bank liabilities and guide the decline of enterprise loan interest rates. Some experts said that it is possible to further reduce the reserve requirement and interest rate in the first half of the year.
The decline of interest rate corresponds to the increase of equity asset valuation. The decline of weighted average interest rate is one of the keys to broaden credit. At present, the market still has doubts about wide credit. Because the M1 data of last January did not perform well. This is also an important reason for the hesitation of the stock market. Analysts believe that with the further decline of interest rates, the wide credit pattern will be opened and the stock market will usher in good expectations.
In fact, today’s market has a strong initial reaction to the positive. At the end of the trading, the capital construction stocks staged a trading limit tide, with more than 20 individual stocks such as GEM stocks Hangzhou Landscape Architecture Design Institute Co.Ltd(300649) , Hanjia Design Group Co.Ltd(300746) , Palm Eco-Town Development Co.Ltd(002431) , Suzhou Thvow Technology Co.Ltd(002564) , Chengdu Road & Bridge Engineering Co.Ltd(002628) , Chengbang shares, Zhejiang Construction Investment Group Co.Ltd(002761) , Ningbo Construction Co.Ltd(601789) , Zhengping Road & Bridge Construction Co.Ltd(603843) , China Haisum Engineering Co.Ltd(002116) trading limit.
future analysis
The enthusiasm of foreign giants to “over allocate” RMB assets has not decreased, and the narrowing of the interest rate gap between China and the United States has not hindered them from continuing to be optimistic about China’s stock market and bond market
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Jufeng investment adviser: two points to pay attention to the continuous contraction rebound and hidden worries about the structural market
