Market changes
On March 16, the market rose sharply, of which the Shanghai stock index closed up 3.48% and the gem index closed up 5.20%. At the industry level, non bank finance, power equipment, social services, transportation, etc. led the increase.
The financial stability Commission of the State Council held a special meeting to release positive signals and stabilize market sentiment
The reason for the sharp rise in the market today mainly comes from the clear and positive response of the financial stability Commission of the State Council to the hot issues concerned by the market, so as to stabilize the market sentiment. On March 16, the financial stability and Development Commission of the State Council held a special meeting. The meeting pointed out that "actively introduce policies beneficial to the market and prudently introduce contraction policies", which is a strong response and positive support to the market's previous concerns about the sustainability and strength of the steady growth policy, which has well stabilized the market sentiment. In addition, the meeting also made a clear response to the hot issues concerned by the market one by one: ① monetary policy should take the initiative to maintain the moderate growth of new loans; ② Real estate enterprises should timely put forward countermeasures to prevent and resolve risks and supporting measures for the transformation of real estate enterprises; ③ Support the overseas listing of enterprises, communicate with the US side on issues related to Chinese concept shares and form a cooperation plan; ④ Platform economic governance adheres to seeking progress while maintaining stability; ⑤ For Hong Kong's financial market, further strengthen communication and cooperation between the two places.
The policy responded to hot issues in a timely and clear manner, and the central bank and the China Banking and Insurance Regulatory Commission responded quickly, indicating that the follow-up of the steady growth policy is still in the overweight period; The cost performance of A-share medium and long-term investment is significant, and there is no need for inertia pessimism
The policy responded quickly and released a positive signal of steady growth. Since the middle of December 2021, the market has continued to retreat, the recent volatility has increased significantly, the decline rate has accelerated, and there has been a phenomenon of amplifying the bad and ignoring the good. In this regard, the financial stability Commission of the State Council made a clear response one by one to the hot issues in the market, released a strong positive signal, and confirmed that in order to achieve the goal of "medium and high-speed growth on a high base" of 5.5%, the policy is still in the period of "steady growth". At the same time, the tone of "prudent introduction of contractionary policies" shows that the policy will not change rapidly. After the financial stability Commission, the central bank and the China Banking and Insurance Regulatory Commission quickly followed up the meeting and stressed "full support for stabilizing the macro-economic market". The rapid response of various ministries and commissions to this shows that the follow-up policies will be "intensively" implemented, the monetary policy will be stable and warm, support the moderate growth of credit, the rhythm of fiscal policy is moderately advanced, and the real estate regulation and control policy will continue the warm tone. Comprehensive policy support will strongly boost market risk appetite.
The market valuation fell sharply to a low level, the safety margin was thickened, and the cost performance of medium and long-term investment was highlighted. At present, the valuations of major market indexes such as wandequan a, Shanghai stock index and gem index have fallen to the quantile levels of 34.13%, 22.60% and 35.93% since 2010, significantly lower than the phased high at the end of 2021, and have been at an absolute low. The valuation of some industries has been significantly underestimated. For example, the current valuation of the electronic industry is 26.7x, which is in the historical quantile of less than 3%. The current valuation of the pharmaceutical industry is 29.1x, which is in the historical quantile of only 5%. The index and industry valuation level, which have fallen sharply and have been low, have thickened the safety margin, have medium and long-term investment value, and there is no need for inertia pessimism for the future market.
Deal with it in a balanced way in the short term and focus on the valuation market in the third stage of growth in the medium term
In the process of wrestling with internal policy and external risk constraints, the market volatility has been amplified, and institutional investors should deal with it in a balanced allocation. At the same time, after substantial adjustment, the valuation level of the market and some industries has returned to a historically low level, and the medium and long-term investment value has been very significant. We pay attention to the market in the third stage of growth and the rebound investment main line of the stable growth sector, which is the weakest constrained by external risks. Main line 1: look forward to the medium-term investment opportunities in the third stage of growth style and pull out the valuation market. At present, it is a good time for layout. Specifically, we can focus on the strong growth main line industries represented by new energy (vehicles) and electronics and the industries expected to benefit from valuation diffusion represented by national defense and military industry and computers. Main line 2: the sector with the weakest steady growth constrained by external risks. Pay attention to new and old infrastructure fields such as building materials, building decoration, urban pipe network transformation and new power grid construction, as well as real estate and banks with the initial reversal of the recent boom. Main line 3: medium and long-term investment opportunities for the recovery of service consumption and the rise in the price of mandatory consumer goods, especially after the recent correction due to the impact of the epidemic. Pay attention to the pharmaceutical sector prepared in advance to realize the recovery of service consumption and the travel chains such as airport, catering, tourism and leisure services after the repeated impact of the recent epidemic. In addition, the medium and long-term investment opportunities of rising prices of necessities also deserve attention, including dairy products, planting industry, chemical fertilizer, etc. In terms of theme, we will continue to pay attention to the digital economy and the reform of state-owned enterprises.
Risk tips
The development of Omicron mutant strain exceeded expectations; There are deviations in policy interpretation; Risk Spillover of geopolitical conflict between Russia and Ukraine; The Fed raised interest rates more than expected and even reduced the table in advance.
