One week market view
The volatility of A-share market increased last week, which was jointly affected by many factors at home and abroad. First, overseas geopolitical conflicts are repeated; Second, a number of large listed companies released positive data in the first two months; Third, the number of confirmed cases of the epidemic in China has increased.
So what signals does the current capital market price reveal?
First, the valuation of the equity market is adjusted to the quantile below the average. The adjustment of the equity market has retreated by 20% – 30% compared with the peak in 2021. At present, the valuation quantile of Shanghai stock index and gem index has returned to below the average of 36% and 45%, and the stock bond return ratio is 83% and 70%.
Second, the negative feedback of equity market funds has not yet appeared. Only the outflow of foreign capital is accelerating, but the scale is limited. From the perspective of leveraged funds, the financing balance is still at a high level of 1.6 trillion, down only 100 billion from the high point in December 2021. In 2018, the financing balance declined from a high of 1 trillion to 700 billion +. From the perspective of the redemption pressure of public funds, there is no centralized redemption of public funds publicly released by the third-party platform. From the position of partial equity funds calculated by wind, the change last week was also relatively limited. From the perspective of overseas funds, the net outflow of funds from Beishang reached 36.3 billion yuan last week, and the scale of net outflow in one week reached the third highest in history, second only to March 2020 (overseas liquidity risk in the early stage of the epidemic) and July 2015 (market crash). From the perspective of industrial capital, the scale of net increase and reduction of Listed Companies in recent months is still net reduction, and the scale of monthly net reduction in recent March is 47.6 billion yuan, 27.6 billion yuan and 19.6 billion yuan respectively; In addition, since 2022, 150 companies have newly announced repurchase plans.
Third, the yield of 10-year Treasury bonds fell below 2.8%, the real estate demand is still low, and the steady growth policy will continue to work. On Friday, the financial data in February was less than expected, and the medium and long-term net financing of residents showed the first negative monthly increase in history. The yield of 10-year Treasury bonds fell from 2.85% to 2.79% last Friday, and returned to the stage of less than 2.8% in February. Economic growth is expected to slow down again, and it will take longer for real estate to grind to the bottom. The credit easing policy is worth looking forward to, and there is still room for new and old infrastructure (electricity / builders / new energy).
Fourth, the volatility of commodity prices has increased, but may continue to remain high, and the market’s concern about inflation is also heating up. Overseas geopolitical conflicts are moving towards a long-term and repeated process. Therefore, despite the periodic easing and positive last week, Comex gold prices are still fluctuating around us $2000; The price of oil distribution has broken through the new high in 2008. At present, despite fluctuations, it is still high above 11 Shenzhen Zhenye(Group)Co.Ltd(000006) 1 prices are also rising; Concerns about inflation are rising. From the historical experience, the price transmission of raw materials and the characteristic background of this round, the sectors of petroleum and petrochemical, coal, non-ferrous metals, agriculture, forestry, animal husbandry and fishery will benefit.
Overall, the release of risk experience in the A-share market last week is still resilient. It is suggested to continue to pay attention to overseas risks, performance landing and more policy stability signals. The current capital market price has revealed more positive structural layout signals. It is suggested to pay attention to the home epidemic prevention sector (medicine / home consumption), inflation sector (petroleum and petrochemical / coal / nonferrous metals / agriculture, forestry, animal husbandry and fishery), steady growth infrastructure sector (electric power / builders / new energy) and stocks in subdivided growth fields whose performance is expected to exceed expectations.
