Market review: panic was concentrated and released, and A-Shares experienced in-depth adjustment
In terms of the market, the Wande all a index has experienced a significant adjustment in the past five trading days, with a cumulative decline of 3.96%. The market turnover was significantly large, reaching a new high in nearly two months. The total net outflow of northward funds this week was 36.321 billion yuan. In the past five trading days, shenwanyi sector showed a general decline, among which social services, household appliances, non-ferrous metals, petroleum and petrochemical, and steel led the decline, while comprehensive, power equipment, food and beverage, medicine and biology, and architectural decoration fell relatively little.
At the beginning of the year, the performance of foreign trade data was relatively good, but the export boom fell somewhat
According to the data released by the General Administration of Customs on the 7th, in the first two months of this year, the total import and export value of China’s goods trade was 6.2 trillion yuan, a year-on-year increase of 13.3%. Among them, the export was 3.47 trillion yuan, an increase of 13.6%; Imports reached 2.73 trillion yuan, an increase of 12.9%, realizing a steady start in foreign trade this year. From the perspective of trading partners, China’s imports and exports to major trading partners such as the EU, ASEAN and the United States increased. In the first two months, the total value of trade between China and the EU was 874.64 billion yuan, an increase of 12.4%, accounting for 14.1% of China’s total foreign trade. The total value of trade between China and ASEAN was 870.47 billion yuan, an increase of 10.5%, accounting for 14%. The total value of Sino US trade was 785.92 billion yuan, an increase of 9.7%, accounting for 12.7%. On the whole, the overall performance of China’s foreign trade data at the beginning of the year is still relatively good, but the export growth rate has begun to slow down. Excluding the influence of price factors, the prosperity has dropped significantly, and the pressure of “stabilizing foreign trade” in the later stage can not be ignored.
Affected by multiple factors, the growth rate of PPI and CPI in February slightly exceeded expectations
According to the data released by the Bureau of statistics on March 9, in February, due to the rise in the prices of international bulk commodities such as crude oil and non-ferrous metals, PPI increased by 0.5% month on month, up 8.8% year-on-year, down 0.3 percentage points from the previous month. Influenced by the Spring Festival and international energy price fluctuations, CPI increased by 0.6% month on month, 0.2 percentage points higher than that of the previous month, and 0.9% higher than that of the previous month. We believe that with the full resumption of work and production of downstream enterprises after the Winter Olympics, some raw materials such as coal, steel and aluminum may still face upward pressure on prices in the short term, and oil, gas, energy metals and other commodities may remain high under the continuation of geographical conflicts. It is suggested to continue to pay attention to the development of geographical conflicts and their impact on the global supply chain, Guard against imported inflation and increase the pressure on China’s economic adjustment.
The performance of financial data in February was lower than expected, and the central bank can expect to increase easing in March
According to the financial data released by the people’s Bank of China on March 11, RMB loans increased by 1.23 trillion yuan in February, a year-on-year decrease of 125.8 billion yuan. In terms of sub sectors, household loans decreased by 336.9 billion yuan, including 291.1 billion yuan in short-term loans and 45.9 billion yuan in medium and long-term loans; Loans to enterprises (Institutions) increased by 1.24 trillion yuan, including 411.1 billion yuan in short-term loans, 505.2 billion yuan in medium and long-term loans and 305.2 billion yuan in bill financing; Loans from non banking financial institutions increased by 179 billion yuan. On the whole, the credit failed to continue the previous recovery trend in February, especially the rare negative growth of residents’ medium and long-term loans, or mainly reflected the weak demand for real estate, the sluggish performance of enterprises’ medium and long-term loans and the lack of investment willingness. The above two points are the “hidden worries” of China’s achieving the economic growth target of 5.5% reflected in the financial data in February, while the short-term loan data of enterprises is positive, Or mainly driven by the acceleration of infrastructure construction and the resumption of work and production after the festival. As a result, the probability of policy easing has increased, and MLF and LPR are expected to be lowered again in March to help “steady growth”.
Zhou Du’s view: market sentiment is expected to gradually repair, focusing on the “steady growth” sector
At the macro-economic level, the continuation of the conflict between Russia and Ukraine has had a certain impact on China’s prices, especially the prices of energy such as coal and oil and the prices of basic metals, which makes the environment for China’s “steady growth” more complex. The Federal Reserve is likely to announce the opening of a 25bp interest rate increase and the specific path of the contraction at the FOMC meeting next week, but it is different from the interest rate increase in 2013, The “tightening road” has been predicted for many months, and the market has fully expected that there may be a correction in energy prices in the short term. However, the impact on the capital market is relatively limited, and China is expected to maintain relative independence. In March, China will further implement the monetary and credit policies. Therefore, China’s macro liquidity is expected to remain reasonably abundant. At the same time, It is suggested to be alert to the spillover effect of the Fed’s tightening process on emerging market countries and the risks brought by marginal changes in the global financial environment.
In terms of the market, the concentrated release of sentiment this week led to the in-depth adjustment of the A-share market. About 4000 stocks fell for several consecutive trading days during the week, falling by more than 4% on Wednesday. The total net outflow of main funds was 121733 billion yuan, and the net outflow of northward funds for five days, driving the general decline of Shenwan class sector. Affected by the outbreak of China’s epidemic, the concept of COVID-19 inspection which experienced a large pullback in the early stage was strong and the week ahead was the strongest. Over 10 leading enterprises in Kweichow Moutai Co.Ltd(600519) and Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) industries reported their monthly business data for the first time to boost market confidence. The concept of Baijiu and the concept of semiconductor were better.
At present, the A-share market has undergone relatively sufficient adjustment, and the allocation value of some sectors has begun to highlight. Under repeated stimulation, the marginal impact of external events such as the conflict between Russia and Ukraine and the Fed’s interest rate hike may be relatively limited. China is expected to further reduce policy interest rates in the near future, strengthen industrial policy guidance and implement “stable growth”. China’s policy environment of maintaining a broad currency and strengthening credit may become a “booster” for the emotional repair of the A-share market. However, under the background of multiple uncertain risks, we predict that the market may still be dominated by volatile structural market in the short term, and the main line of the current market is not clear, We propose to focus on the following two points in the allocation: first, continue to focus on the “steady growth” industrial chain. Second, timely intervene in the high boom track with industrial logic support in combination with valuation changes.
In terms of industry, (1) pay attention to the real estate sector. The financial data in February reflect that the demand for real estate is still relatively weak, and the policy is expected to be further relaxed to support the performance of the real estate market under the background of “stable growth”, while the current valuation level of the real estate sector is also at an all-time low, or in a period of better value allocation, under the guidance of “preventing financial risks” and “taking measures for the city”, It is suggested to focus on local real estate enterprises with relatively healthy balance sheet. (2) Focus on the pharmaceutical sector. The valuation level of the pharmaceutical sector is in a reasonable range. The recent deterioration of the epidemic situation in China has led to the resurgence of the covid-19 concept. At the current time point, it is recommended to pay attention to the covid-19 detection and the high-quality target of the covid-19 specific drug concept sector. In addition, under the favorable policies, the traditional Chinese medicine sector still has better allocation value, so it is recommended to focus on it. (3) Cautious response to the energy sector. Recently, under the influence of geopolitical conflicts, energy prices outside China have repeatedly reached new highs, driving the rapid rise of valuations of relevant sectors. On the whole, the tight supply pattern of oil, gas and coal is difficult to change, and the price center may have risen. However, the recent rise range of some targets may have fully fulfilled the price rise expectations. If the margin of geopolitical risk slows down, it may cause great fluctuations. At the same time, Under the environment of overseas attention to high inflation and China’s stable national production, the probability of negative factors on the policy side has increased. It is suggested to deal with it carefully.
Medium and long term strategy
In the medium and long term, we suggest investors continue to focus on three directions. Consumption sector: medicine and consumption upgrading. Long term high-quality track: carbon neutralization, scientific and technological innovation and new infrastructure. Stable bottom position variety: big finance.
Risk tips
Global liquidity tightened more than expected; The global epidemic has developed beyond expectations; The macroeconomic growth rate fell faster than expected; The global energy crisis has further intensified; Inflation pressure continues to rise; Technological development is less than expected.
