Key points of the report
Since the outbreak of the Russian Ukrainian war in late February, sanctions have been intensively introduced, and the prospect of the situation is still uncertain. Generally speaking, the secondary impact of war deserves more attention. We believe that the conflict between Russia and Ukraine has further highlighted the trend of “anti globalization”, led to the reconstruction of the global supply chain, reduced efficiency and increased costs. The five “safety” and “independent control” will be the guiding ideology and core logic of investment for the development of countries and enterprises in the next few years.
The impact of previous geopolitical crises on major categories of assets. “Taking history as a mirror, we can know the rise and fall”. By analyzing the 12 geopolitical crises and 10 major asset indicators since 1970, we find that the most affected by the geopolitical crisis is the price of crude oil, which generally shows a sharp rise. The yield of 10-year US bonds has a high probability of short-term decline, while the yen is likely to rise. The stock market is more affected by the changes in investor sentiment caused by different places of war. Under the large-scale war, the European and American stock markets are less affected by the conflict, and A-Shares have a downward trend under the influence of war sentiment in the short term, but in the long term, the performance of A-Shares has no obvious correlation with the geopolitical crisis, and is still dominated by its fundamentals; Under the small geographical conflict, European and American stock markets tend to rise, while A-Shares generally fall under the influence of investor sentiment caused by different investor structures and places of war.
Taking history as a mirror, how does the conflict between Russia and Ukraine affect major categories of assets? After the outbreak of the conflict between Russia and Ukraine, the limitation of Russian crude oil export led to the sharp rise of crude oil price, the rise of risk aversion led to the obvious rise of gold price and US dollar index, and the general decline of risky assets. The Russian Ukrainian war happened suddenly. Its essence is the game between Russia and NATO. The market is worried that the relevant sanctions imposed by western developed economies on Russia may affect China, and the disturbance of the periodic outbreak of covid-19 epidemic may have a significant negative impact on global inflation and economy. Therefore, in the short term, the Russian Ukrainian war has a significant impact on investor sentiment, which may lead to the decline of a shares; In the long run, the performance of A-Shares is weakly related to the war, and the future trend depends more on the fundamentals of A-Shares themselves.
The conflict between Russia and Ukraine highlights the trend of “anti globalization”. The outbreak of the Russian Ukrainian war will worsen the already tight global supply chain under the epidemic. We believe that the development of “global integration” that pursues the priority of “efficiency” may gradually become a thing of the past, replaced by the “group heating” of economies in small groups. In the report “security” + “development” – the underlying investment logic of the Chinese market in the future “released in early September last year, we mentioned that national defense security, food security, supply chain security, resource security and economic security are the five foundations under the dimension of” security “. Today, the escalating trend of “anti globalization” will lead to the reconstruction of the global supply chain, resulting in reduced efficiency and rising costs. The issues of “food security”, “resource security” and “supply chain security” deserve more attention. In addition, the conflict between Russia and Ukraine has also given China more warnings at the level of “national defense security” and “economic security”.
Investment suggestions: the five “safety” and “self-control” will be the guiding ideology of national and enterprise development and the core logic of investment in the next few years. It is suggested to pay attention to the following six investment opportunities: (1) photovoltaic, wind power and energy storage sectors related to “resource security”. (2) Military industry related to “national defense and security”. It is suggested to pay attention to the leading military equipment, military electronics and aeroengine sectors, the military material sector with high technical barriers and the military informatization field under the demand of “domestic substitution”. (3) “Hard technology” and high-end manufacturing sectors related to “supply chain security”. It is suggested to pay attention to “hard technology” and high-end manufacturing enterprises that meet the national strategy, break through key core technologies and have high market recognition, including industrial machine tools, 5g, PCB, chips, semiconductors, and related fields of “Dazhi cloud mobile chain finance”. (4) “Food security” related seed industry sector. It is suggested to pay attention to the head companies of the seed industry with high R & D ability and sustainable innovation ability, as well as the “transgenic” related companies with rich reserves of transgenic technology. (5) The relevant figures of “economic security” are RMB. (6) Brokerage sector.
Risk tips: 1. China’s macro policy is not as strong as expected;
2. The global epidemic situation worsened again; 3. The situation in Russia and Ukraine continued to deteriorate, triggering other geopolitical crises.
