Last week, the global financial market, including a shares, continued to fluctuate against the background of further fermentation of geographical conflicts. There was a net outflow of foreign capital from a shares, and many factors led to a strong market pessimism. However, the institutional view over the weekend shows that some positive signals have begun to appear in the current market, and the market may have entered the classic bottom seeking and bottom building process. The supply risk caused by short-term geographical events and other factors may still continue to ferment, but in the medium term, the Chinese market is still relatively resilient. Once many uncertain factors affecting the market fall, A-Shares are expected to return to the upward cycle.
overseas financial markets continue to fluctuate
Last week, major overseas financial markets continued to fluctuate, and the situation in Russia and Ukraine is still an important factor affecting the trend of the external market. On March 11 local time, with the positive signal from Russia, the European stock market once rose sharply, and the German stock market rose by 5%.
However, after the news of the escalation of Western sanctions against Russia came, the market risk aversion warmed up again. As of the close of last Friday, the closing gains of major stock indexes in European stock markets converged: Germany’s DAX index rose 1.38%, France’s CAC40 index rose 0.85% and Europe’s stoxx50 index rose 0.97%.
However, the three major US stock indexes opened higher and closed lower: the Dow Jones industrial index fell 0.69%, the S & P 500 index fell 1.30% and the NASDAQ index fell 2.18%. From the weekly chart, the weekly K line of the Dow has fallen for five consecutive times.
In the concept sector, agricultural machinery, infrastructure, leasing services, shipping and anti-cancer medicine sectors rose higher under the favorable conditions of the new US budget, while China concept stocks fell continuously. Last Friday, Didi travel fell 44% and fogcore technology fell more than 36%; In addition, Weilai fell more than 9%, Xiaopeng automobile fell 12.12% and ideal automobile fell 14.70%.
Pang Ming, chief economist of Huaxing securities (Hong Kong), said: “After last July, many investors in China concept stocks have left the market. Since this year, there has been a new wave of investors who feel that the valuation has reached the end and are expected to rebound. However, the market has adjusted down another 10%, indicating that the capital sentiment is still very fragile. Investors who want to rebound may find that the risk is still great, and the stock price fluctuation may temporarily deviate from the fundamentals. Therefore, it is recommended to invest Investors should pay attention to risk prevention and position management when volatility increases. “
configured foreign capital net outflow
Under the background of continuous fluctuations in overseas financial markets, EPFR capital data showed that overseas funds continued to flow out of A-Shares last week. The weekly outflow of northbound funds was 36.32 billion yuan, the largest weekly outflow since March 2020 and the third highest weekly net outflow in history.
Citic Securities Company Limited(600030) strategy team said that the main reason for the recent net outflow of funds from the North was the net redemption of overseas China related theme funds and the active sale of hedge funds for two consecutive weeks. Since February, the net outflow of northbound funds has mainly come from trading funds, but last week, allocation funds also began to flow out.
Citic Securities Company Limited(600030) analysis shows that the net outflow of trading funds or the corresponding active reduction of hedge funds. The trading funds entrusted to foreign investment banks are mainly hedge funds. These funds focus on short-term trading opportunities and have obvious timing characteristics. In the first week after the Spring Festival (February 7-11), the trading funds once had a net inflow of 6.6 billion yuan, but turned into a continuous net outflow with the deterioration of the situation in Russia and Ukraine, with a cumulative net outflow of 43.3 billion yuan from February 14 to March 9.
The net outflow of allocation funds may be due to the continuous net redemption of overseas China related funds (especially ETFs) in the past two weeks. Unlike transaction funds, the allocation funds entrusted to foreign banks are less selective, and generally maintain a relatively stable net inflow.
According to Citic Securities Company Limited(600030) observation, the net flow of allocated funds defined by Citic Securities Company Limited(600030) has obvious correlation with the application and redemption data of “China fund” tracked by Thomson Reuters, and these allocated funds include a considerable number of passive ETF funds. These passive ETF funds have seen net redemptions in the past two weeks for the first time since December last year, with a weekly net redemption rate of about 2%.
However, Citic Securities Company Limited(600030) also stressed that while the net outflow of funds from the north, it is still continuing to net flow into the heavy warehouse industry – power equipment and new energy, and the active management funds behind it may also be changing positions at the same time. The main inflow stocks are photovoltaic ( Sungrow Power Supply Co.Ltd(300274) ) and smart grid ( Nari Technology Co.Ltd(600406) ) Citic Securities Company Limited(600030) said that, on the whole, although there has been a certain degree of net redemption by overseas institutions recently, the capital flow of redemption application by domestic institutions remains stable as a whole. Therefore, there is no case that large-scale net redemption leads to “forced selling” and then leads to a negative feedback cycle, The recent adjustment of the A-share market may still be related to the manager’s active position reduction and position adjustment when the market sentiment is weak.
A-Shares “market bottom” to be confirmed
The spread of the epidemic, the external risk disturbance has not been eliminated, and there is a net outflow of foreign capital. Various factors led to A-share market pessimism last week. However, the institutional view over the weekend shows that some positive signals have begun to appear in the current market, and the market may have begun to enter the classic bottom seeking and bottom building process. From mid April to mid May, A-Shares are expected to return to the upward cycle after many uncertain factors are landed.
China International Capital Corporation Limited(601995) strategy team said that the supply risk caused by short-term geopolitical tensions and other factors may still continue to ferment, but in the medium term, the Chinese market still has relative resilience: first, China is in a relatively favorable growth and policy cycle, and the policy reserve space of “steady growth” is relatively sufficient, and the growth may gradually improve around the second quarter; Secondly, the valuation of China’s market is at a relatively low historical level, which is also attractive compared with other major markets; Finally, at present, as an important manufacturing country in the world, China has the largest and relatively complete industrial chain in the world, and the inflation pressure is relatively controllable. In the global supply risk, the Chinese market may be relatively more resilient.
Structurally, many institutions believe that the short-term undervalued “steady growth” sector may have relative benefits. After the risks gradually subside, the high boom growth fields and the middle and lower reaches manufacturing industry squeezed by costs may usher in a turnaround.
China Merchants Securities Co.Ltd(600999) strategy team believes that the current market trend around “demand from stable growth, profits to the upstream” is very obvious. It is recommended that investors layout all kinds of upstream links that benefit from the steady growth policy, and they will have better performance in the upcoming quarterly disclosure season.
Boc International (China) Co.Ltd(601696) strategy team said that from the medium and long-term perspective, the U-shaped bottom was gradually confirmed during the year. The valuation quantile of the broad-based index has returned below the historical average. Subsequently, with the gradual stabilization of the economy, the risk premium of stocks and bonds points to the dominance of equity. Under the expectation of abundant liquidity, the stock market is expected to bottom and rise. Among them, the high boom track has the configuration value and rising power. It is suggested to pay attention to the semiconductor industry chain, photovoltaic and wind power of new energy, 5g new infrastructure, intelligent electric vehicles, digital economy and other sectors.
Citic Securities Company Limited(600030) said that the “market bottom” of A-Shares was confirmed twice and will usher in a resonance upward of value and growth with the repair of valuation deviation. On the allocation, we should insist on the balanced distribution of style and industry, adhere to the main line of steady growth, continue to focus on the “Two Lows”, and focus on the future of lithium, photovoltaic, semiconductor, Baijiu, medicine and construction.
