Historical Shanghai outlying risks will affect China's stock market in the short term and remain limited in the medium term. We believe that the impact of this round of medium-term uncertainty is that if the situation continues to escalate, it may exacerbate the premium of resource supply and have an adverse impact on overseas inflation and monetary policy.
Looking ahead to the future, we recently stressed that the first half of this year experienced a "policy bottom, sentiment bottom and growth bottom" in turn. At present, the policy bottom has been relatively clear. The higher than expected credit social finance data in January further confirmed the "policy bottom". if the geography and epidemic situation no longer exceed the expectations, the "sentiment bottom" is expected to be gradually confirmed , Subsequently, with the gradual implementation of the steady growth policy, the "bottom of growth" may also gradually appear from the first quarter to the second quarter. There is no need to be overly pessimistic about the big market in the follow-up from the perspective of structure, we believe that the risks of growth stocks have been released in the early sharp correction and are gradually entering the stage of "bargain hunting"; The "steady growth" sector fluctuates more, but there may still be room for performance in the future. On the whole, compared with the "stable growth" in the early stage, the market style is likely to gradually transition to a relatively balanced stage
currently focuses on three directions: 1) potential areas of policy support, including infrastructure, industrial chains related to stable demand for real estate (building materials, construction, household appliances, home furnishings, etc.), brokerage finance, etc;
2) for the middle and lower reaches consumption that has been adjusted in 2021, the valuation is not high, and the medium and long-term prospects are still clear, choose stocks from the bottom up, including household appliances, light industry and household appliances, automobiles and parts, the Internet, agriculture, forestry, animal husbandry and fishery, medicine, etc;
3) the risk of manufacturing growth sector, including new energy vehicles, new energy and technology hardware semiconductors, has been released, and may enter the bargain hunting stage in the future.
market return Gu : the index fluctuated widely and the transaction was significantly enlarged
This week, affected by the geopolitical risk of the escalation of the conflict between Russia and Ukraine, the volatility of risk assets such as global stock markets increased, crude oil and gold rose and fell, and A-Shares also fluctuated greatly under the influence of sentiment. The Shanghai stock index fell 1.1% this week, and the average daily turnover was enlarged to 1.06 trillion yuan, and 1.35 trillion yuan was traded on Thursday, which was a high level in recent four months, with a net outflow of 6.4 billion yuan this week. In terms of style, the growth style continued to strengthen, and the gem index and Kechuang 50 rose 1.0% and 3.0% against the trend; The CSI 300 performed poorly, with a weekly decline of 1.7%. In terms of industry, although external fluctuations suppress market sentiment, the manufacturing growth field with large decline since the beginning of the year has bucked the trend, with power equipment and new energy, national defense and military industry and electronics leading the rise, and the overall performance of the new energy vehicle industry chain is good; Affected by the rising cost caused by the rising price of resource products, the construction and building materials sector led the decline, and the overall performance of the media and downstream consumer industries was also weak.
Market Outlook: "emotional bottom" may be gradually confirmed and the style is more balanced
This week, the escalation of the conflict between Russia and Ukraine has led to increased market volatility, and its impact on the Chinese market includes the following channels: 1) emotional level: the escalation of geographical conflict brings uncertainty, which may make the market cautious in the short term; 2) Liquidity: driven by risk aversion, overseas funds may withdraw and affect asset prices; 3) Fundamental level: global demand, especially the demand fluctuation related to Europe, affects China's economic growth through foreign demand and import and export trade; 4) Policy level: as a large country of resource goods, Russia and Ukraine may raise global inflation expectations and strengthen the contraction expectation of peripheral monetary policy due to large price increases caused by supply premium historical Shanghai outlying risk will affect China's stock market in the short term and remain limited in the medium term. We believe that the impact of this round of medium-term uncertainty is that if the situation continues to escalate, it may aggravate the premium of resource supply and have an adverse impact on overseas inflation and monetary policy however, from the current cyclical position of China's growth and policies, China's steady growth policy may be a more key factor determining the market. On the whole, the Chinese market may be relatively limited by overseas fluctuations. The selling of risk aversion alone has released the pressure on valuation to a certain extent. At present, the forward P / E ratio of Shanghai and Shenzhen 300 has dropped to 10.6 times, It is significantly 12.6 times lower than the historical average, the equity risk premium has also rebounded above the historical average, and the problem of overestimation of gem and popular tracks has also been alleviated.
Looking ahead to the future, we recently stressed that the first half of this year experienced a "policy bottom, sentiment bottom and growth bottom" in turn. At present, the policy bottom has been relatively clear. The higher than expected credit social finance data in January further confirmed the "policy bottom". if the geography and epidemic situation no longer exceed the expectations, the "sentiment bottom" is expected to be gradually confirmed , Subsequently, with the gradual implementation of the steady growth policy, the "bottom of growth" may also gradually appear from the first quarter to the second quarter. There is no need to be overly pessimistic about the big market in the follow-up. From the perspective of structure, we believe that the risk of growth stocks has been released in the early sharp correction and is gradually entering the stage of "bargain hunting"; The "steady growth" sector fluctuates more, but there may still be room for performance in the future. On the whole, compared with the "stable growth" in the early stage, the market style is likely to gradually transition to a relatively balanced stage recent progress in the following aspects:
1) close to the two sessions, we will continue to pay attention to the steady growth of policies and the direction of key reforms 3 on March 4 and March 5, the fifth session of the 13th CPPCC National Committee and the fifth session of the 13th National People's Congress will be held, focusing on the setting of economic work objectives in the government work report. The direction and details of steady growth in currency and finance may also be further clarified. At the same time, we should also pay attention to common prosperity, key technical fields and scientific and technological innovation, rural revitalization, digital economy More specific planning and expression of key reform directions such as carbon neutralization. We expect that the policy tone of the two sessions may be relatively positive for the market under the background of still great pressure on economic growth.
2) steady growth and recent progress on Friday, the Political Bureau of the CPC Central Committee held a meeting. The overall tone of "upholding stability and seeking progress while maintaining stability" was basically consistent with the central economic work conference at the end of the year. According to media reports, recently, commercial banks in Guangzhou, Nantong and other places have successively lowered mortgage interest rates [1]; The China Banking and Insurance Regulatory Commission and the Ministry of housing and urban rural development issued guidance to support insurance funds to provide long-term financial support for affordable rental housing projects through direct investment or subscription of creditor's rights investment plan, but do not play a "marginal ball" for regulatory arbitrage. Policy support in the real estate field is still one of the current policy priorities.
3 ) pay attention to the annual performance of listed companies as of February 26, about 63% of the companies in the two cities have completed the disclosure of 2021 performance forecast / Express / annual report. Combined with the median value of the forecast and the actual performance, the profit of all a / non-financial companies in 2021 under comparable standards increased by 55% and 65% year-on-year. There is still room for further revision, focusing on the performance verification of the early boom track, For example, some leading companies in the semiconductor sector performed better than expected this week, bringing better performance to the sector.
4) progress of the epidemic situation: although the proportion of new cases in the world has dropped recently, the number of new cases in Hong Kong, China, has exceeded 10000 in a single day [2], and has spilled to Shenzhen and other cities. There are still local epidemics in many parts of the country, and the infectivity and pathogenicity of Omicron can not be ignored, Continue to pay attention to the impact of the epidemic on China's economic activities and China's response.
5) overseas risk factors the situation in Russia and Ukraine evolved rapidly. On February 26 Xinhuanetco.Ltd(603888) reported that Russian ground troops had entered the north of Ukrainian capital Kiev on the 25th [3]. The panic in the global market fell on Friday, the VIX Index fell, gold and crude oil had lost all gains after the conflict on Thursday, and the US stock market stopped falling and rebounded, At the same time, the probability of the Federal Reserve raising interest rates by 50bp in March has also decreased significantly. In the future, we still need to focus on tracking the evolution of the situation in Russia and Ukraine, especially the impact on the supply of resource goods.
bank industry suggestions : compared with the "stable growth" in the early stage, the market style may gradually move towards relative balance
currently focuses on three directions: 1) potential areas of policy support, including infrastructure, industrial chains related to stable demand for real estate (building materials, construction, household appliances, home furnishings, etc.), brokerage finance, etc;
2) for the middle and lower reaches consumption that has been adjusted in 2021, the valuation is not high, and the medium and long-term prospects are still clear, choose stocks from the bottom up, including household appliances, light industry and household appliances, automobiles and parts, the Internet, agriculture, forestry, animal husbandry and fishery, medicine, etc;
3) the risk of manufacturing growth sector, including new energy vehicles, new energy and technology hardware semiconductors, has been released, and may enter the bargain hunting stage in the future.
recent concerns: 1) the convening of the two sessions and China's steady growth policy; 3) Epidemic situation outside China; 4) Overseas geopolitical risks; 5) US inflation and monetary policy.
