Affected by the Dow’s sharp drop of more than 600 points last Friday, the trend of Asia Pacific stock market was bleak yesterday, but the three major A-share indexes opened lower and went higher. Analysts believe that the superposition of positive policies, resilient fundamentals, overseas long-term capital inflows and attractive valuation are the four endogenous factors for A-Shares to be fearless of external shocks. A-Shares are gradually “desensitized” to the external bad, and there are signs of going out of the independent market.
Yesterday, A-Shares suffered the impact of bad external conditions, and the three indexes opened low and went high. The Shenzhen composite index opened 1.93% lower in the morning, but with the influx of buying, the index rose all the way, and the decline narrowed to 0.98% as of the close. The gem index opened 1.67% lower in early trading, but the closing decline narrowed to 0.91%. The stock index opened 1.6% lower in early trading and closed down 1.17%.
The trend of some A-share plates has got rid of the influence of the trend of peripheral markets. The pharmaceutical sector led the rise, and individual stocks such as Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) and Huadong Medicine Co.Ltd(000963) increased by more than 3%; The performance of the communication sector is also commendable, and individual stocks such as Shenzhen Fastprint Circuit Tech Co.Ltd(002436) and Olympic Circuit Technology Co.Ltd(603920) rose by the limit. The auto parts sector was among the top gainers, with Dongfeng Electronic Technology Co.Ltd(600081) and Shanghai Sinotec Co.Ltd(603121) stocks rising by the limit.
Tianfeng Securities Co.Ltd(601162) said that every short-term rapid decline caused by external bad news is a process of capital continuously adjusting the structure and focusing on consumption leaders and technology leaders. Behind the “desensitization” of consumption leaders and technology leaders to external bad news is the support of stable profitability and deterministic trend.
The main A-share indexes also form a “desensitization” trend with peripheral bad. Analysts believe that the superposition of positive policies, resilient fundamentals, overseas long-term capital inflows and attractive valuations are the four endogenous factors for A-Shares to fear external shocks.
A-share policy continues to expand, which has formed a very strong cumulative effect. For example, on August 25, relevant principals of the CSRC held a meeting to discuss and refine the overall reform plan of the capital market. At present, the deepening reform plan of the capital market has basically taken shape, and A-Shares are about to usher in positive results in a series of basic system reforms, legal guarantee, the quality of listed companies and the entry of long-term funds into the market. For another example, the central bank announced on August 17 to improve the LPR formation mechanism. Many research institutions believe that the adjustment of LPR mechanism helps enterprises reduce financing costs by promoting the marketization of interest rates, which is beneficial to all industries. In the short term, it helps to improve market risk appetite, which is good for the A-share market.
A shares have strong fundamentals under policy hedging. Citic Securities Company Limited(600030) said that under the counter cyclical hedging of monetary policy and fiscal policy, the overall profit of A-Shares is resilient and is expected to maintain growth in 2020.
Overseas long-term capital inflows can be expected. On August 27, MSCI raised the inclusion factor of Chinese market A-Shares from 10% to 15%, which came into effect; On September 23, FTSE Russell raised the inclusion factor of China’s A-Shares from 5% to 15%, which came into effect; On September 23, the S & P Dow Jones index will be included in China’s A-Shares at one time with an inclusion factor of 25%. Analysts believe that the synchronous increase of the three indexes is expected to bring massive new funds to a shares.
The overall valuation of A-Shares is at a relatively low historical level, which is attractive for long-term funds. Statistics show that as of yesterday’s closing, the P / E ratio of Shanghai 50 index is only 8 times, that of Shanghai and Shenzhen 300 index is 10 times, and that of small and medium-sized board index is 28 times.
Market participants believe that many internal factors will give birth to the “autumn market” of a shares. Anxin Securities said that the focus of the autumn market is a new round of short-term demand side and medium-term supply side policy combination promotion, such as wide credit, active finance, reform and opening up and supporting private enterprises. If there is a certain adjustment in the market in the short term, we should grasp the opportunity to bargain hunting and layout high-quality companies.
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(Shanghai Securities News)
