Key investment points:
The third round of Russia Ukraine negotiations has no substantive results
According to the news of China Central Television, on the evening of March 7 local time, after the third round of Russian Ukrainian negotiations, bodoliyak, an adviser to the Ukrainian presidential office, said that the third round of Russian Ukrainian talks did not achieve results that could substantially improve the situation. Mezinski, head of the Russian delegation, said that Russia hoped that the humanitarian corridor would start to operate from tomorrow, which was guaranteed by Ukraine. The expectations of the Ukrainian State of Brest for talks with Russia failed to materialize. Russia also said that the negotiations with Ukraine will be held as soon as possible, but Russia has no illusions about the results of the next negotiations.
Earlier, according to China Central Television News, the European Commission hopes to put forward a plan for rapid decoupling from Russia on the 8th. The United States is also considering implementing an oil embargo, while Germany wants to continue to import energy from Russia. German Chancellor Scholz made it clear on the 7th local time that it is impossible to completely eliminate energy imports from Russia in the short term. Germany is highly dependent on Russia for fossil fuels. According to the data released by the Federal Ministry of economy, Russia accounts for about 55% of Germany’s fossil and natural gas imports, 50% of coal imports and 35% of crude oil imports. Within the EU, about 40% of natural gas imports come from Russia. On Monday, the amplitude of the global financial market was large, and crude oil fell after opening sharply, but it still closed up significantly; European stocks opened sharply lower and the intraday decline narrowed; US stocks fell sharply, the Dow fell more than 800 points and the NASDAQ fell 3.6%; LME nickel rose more than 90% in the session, hitting a record high of US $55000 / ton, closing up 74.28% at US $50400 / ton. With the global nickel inventory at a ten-year low, the situation in Russia and Ukraine raised concerns about the nickel supply of Norilsk Nickel, one of the world’s largest nickel producers. Export growth fell, but it is still resilient
According to the statistics of the General Administration of customs, from January to February 2022, the export was 16.3% year-on-year, the former value was 20.9%, the import was 15.5% year-on-year, the former value was 19.5%, the trade surplus was 116 billion US dollars, the former value was 71.71 billion US dollars, and the same period last year was 97.06 billion US dollars.
Export growth fell, but it is still resilient. Although the year-on-year growth rate of exports decreased compared with that in December last year, it is still high as a whole, reflecting a certain degree of toughness. From the whole year of this year, the probability of gradual decline in export growth is high, but it will maintain a relatively high prosperity in the short term.
There are still reasons for resilience in the short term: 1) the export base was not too high before June, adding that the current commodity price is still high, and the price factor will still be significantly supported. 2) In the first two months, South Korea’s exports grew by 17.8% year-on-year, indicating that although the prosperity of foreign demand fell slightly, it is still not weak as a whole.
Reasons for the gradual decline of export growth during the year: 1) the export base will rise significantly in the second half of the year. 2) Globally, the current round of epidemic has gradually improved, overseas restrictions have been gradually liberalized, and the substitution effect of China’s exports may be weakened. 3) Overseas consumer demand for goods has gradually shifted to demand for services. 4) The performance of RMB is relatively strong. Even if there is a certain degree of depreciation, we think the space is relatively limited, and the exchange rate will affect exports. 5) Geopolitical factors continue to ferment, and the sharp rise in commodity prices such as crude oil and natural gas leads to the high global inflation, which may affect the recovery of the global economy and lead to some uncertainty in foreign demand.
The export growth rate of steel products and integrated circuits is relatively high. By product, Shenzhen Agricultural Products Group Co.Ltd(000061) year-on-year 21.5%, previous value 17.7%; The year-on-year growth rate of steel was 34.4%, and the former value was 84.9%. Although it fell a lot, it was still significantly higher than the overall export growth rate; Textile yarn was 11.9% year-on-year, with the previous value of 16.21%. The improvement of the global epidemic may lead to a slight decline in demand; Clothing and accessories were 6.1% year-on-year, with the former value of 14.5%; High tech products were 14.7% year-on-year, with the former value of 23.08%; Electromechanical products were 12.5% year-on-year, and the former value was 18.12%. Among them, mechanical and electrical products have been differentiated. Mobile phones and household appliances have decreased from 33.19% and 17.59% to 1.2% and – 3.6% respectively, and integrated circuits have increased from 20.96% to 27.7%.
On the whole, we maintain the short-term resilience of exports and judge that exports will gradually decline during the year. The supporting role of exports to the economy may be significantly weakened in the second half of the year.
The financing balance decreased. On March 4, the balance of A-share financing was 1628106 billion yuan, a month on month decrease of 5.336 billion yuan; The balance of margin trading was 172295 billion yuan, a decrease of 7.312 billion yuan month on month. The balance of financing minus securities lending was 1533262 billion yuan, a month on month decrease of 3.359 billion yuan.
There was a net outflow of land stock connect and a net inflow of Hong Kong stock connect. On March 7, the net purchase transaction of land stock connect on that day was -8.271 billion yuan, including 53.508 billion yuan of purchase transaction and 61.779 billion yuan of sales transaction, with a cumulative net purchase transaction of 1649288 billion yuan. Hong Kong stock connect had a net purchase transaction of HK $5.449 billion on the same day, including a purchase transaction of HK $25.992 billion and a sale transaction of HK $20.543 billion, with a cumulative net purchase transaction of HK $2247531 billion. Money market interest rates rose. On March 7, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor overnight interest rate was 2.0390%, up 13.70bp, Shibor one week was 2.0680%, up 2.00bp. The weighted interest rate of pledged repo of deposit institutions was 2.0285% overnight, up 13.60bp and 2.0603% a week, up 2.52bp. The 10-year yield to maturity of China national debt was 2.8126%, up 0.01bp.
European and American stock markets fell sharply. On March 7, the Dow Jones Industrial Average closed at 3281738 points, down 2.37%; The S & P 500 index closed at 420109 points, down 2.95%; The NASDAQ index closed at 1283096 points, down 3.62%. European stock markets, French CAC index closed at 598227 points, down 1.31%; Germany’s DAX index closed at 1283465 points, down 1.98%; The FTSE 100 index closed at 695948, down 0.40%. In the Asia Pacific market, the Nikkei index closed at 2522141 points, down 2.94%; The Hang Seng Index closed at 2105763, down 3.87%.
The dollar index rose. On March 7, the dollar index rose 0.76% to 992599. The euro fell 0.70% against the dollar to 1.0857. The dollar rose 0.39% against the yen to 1152820. Sterling fell 0.99% against the dollar to 1.3107. The spot exchange rate of RMB against the US dollar closed at 6.3183, up 0.01%. The spot exchange rate of offshore RMB against the US dollar closed at 6.3257, up 0.02%. The central parity rate of RMB against the US dollar closed at 6.3478, depreciating by 0.30%.
Gold and crude oil rose, while copper fell. On March 7, Comex gold futures rose 1.36% to close at US $200180/oz. WTI crude oil futures rose 4.63% to close at US $120.32/barrel. Brent crude oil futures rose 5.35% to close at US $124.37/barrel. COMEX copper futures fell 3.45% to close at US $4.7490/lb. LME copper three-month futures fell 2.69% to close at US $10315 / ton.
