during the new year offensive, the Shanghai Stock Exchange hit 3700 points. the monarch strategy proposed in early November that “the next investment time point is in the cross year period”. In the past month, the Shanghai stock index has increased by 4.01%, and the cross year offensive is slowly unfolding. Today, the market also continued the recent upward trend, in which the Shanghai index hit 3700 points for many times. We believe that the recent upward trend of the market is mainly due to mild policy agitation and liquidity agitation. 1) moderate and restless policies : the 2021 economic work conference pointed out that the economy is facing triple pressures of demand contraction, supply shock and weakening expectation, and steady growth has become the primary goal of economic work. With the strengthening of fiscal policy expenditure and the leading pace, the monetary policy is stable and wide, superimposed with the marginal correction of recent real estate policy, and the decline of policy uncertainty has become the core driver of the recent market upward; 2) liquidity agitation : the full reduction of reserve requirements and the gradual realization of loose expectations are also an important driving force for the continuous upward market in the near future.
general trend : agitation is not achieved overnight. we believe that this round of cross-year offensive is not a fast work in a short time. In the future, the market will have better sustainability under the continuous verification of fundamentals and policy catalysis, and the rising rhythm will be more moderate. 1) agitation is not achieved overnight: with the convening of the central economic work conference and the gradual realization of loose expectations, investors have gradually moved from early differences to consensus on policy tone, real estate risk and other issues. With the gradual full pricing of the above expected correction by the market, it is difficult to make a new marginal incremental contribution in the short term, and the market is difficult to continue to work fast in a short time; 2) the cross year offensive has good Sustainability: at present, the impact of the central economic work conference on the market is more focused on reducing uncertainty and driving the periodic decline of risk assessment, but the fundamental expectation has not changed significantly. In the future, this round of cross year offensive will be further deduced with the continuous verification of economic / financial data. There is still room for imagination to superimpose loose expectations, and the market is expected to continue until January February 2022.
consumption and finance lead the cross year offensive. 1) Consumption: the current weak demand is the core problem restricting the start of the consumption sector. Intuitively, the central economic work conference did not have much direct ink on consumption. However, the meeting pointed out that social policies should stick to the bottom line of people’s livelihood, continue to do a good job in the “six stabilities” and “six guarantees”, especially in ensuring employment, people’s livelihood and market players, pay close attention to the employment of key groups, and implement the measures to stabilize employment. With the gradual development of the “six stabilities”, “six guarantees” and employment priority policies, the K-type differentiation of economic recovery will become more convergent and domestic demand will further expand; 2) Finance: the current real estate problem is the biggest resistance to the market start of the financial sector. The central economic work conference proposed to better meet the reasonable housing needs of property buyers, and proposed the development of affordable housing and rental housing. Real estate credit risk is expected to be further released, and the vicious circle of self strengthening credit risk in the early stage is expected to be broken. With the gradual improvement of real estate risk expectation, the undervalued financial direction represented by securities companies has high allocation value.
economic uncertainty is reduced, risk assessment is down and risk appetite is up, helping the cross year offensive. with the convening of important meetings, the core of the policy is to stabilize the economy, to follow the steady growth order and the extent of pessimism correction. It recommends: 1) consumption: accelerate the expected bottom and recommend the direction of Baijiu, pig, household appliances, furniture and social service / tourism that are supported by the performance and are downplayed. 2) Finance: securities companies and banks; 3) Technology manufacturing: consumer electronics and semiconductors; 4) New energy: high prosperity directions such as photovoltaic and new energy vehicles.
（ Guotai Junan Securities Co.Ltd(601211) ）
