A shares and Hong Kong stocks that have fallen for days finally show signs of recovery.
On March 16, the financial stability and Development Commission of the State Council held a special meeting to study the current economic situation and capital market problems. The meeting stressed that relevant departments should earnestly assume their responsibilities, actively introduce policies conducive to the market and prudently introduce contractionary policies. We should respond to the hot issues concerned by the market in a timely manner. All policies that have a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations.
As soon as the news was released, as a reassurance to the depressed market, A-Shares quickly and strongly turned red, staged a “V” rebound, and the three indexes rose by more than 3%. As of the close, the Shanghai index closed up 3.48%, the Shenzhen index rose 4.02% and the gem index rose 5.2%.
Statistics show that 4308 in the two cities rose, 384 fell and 41 flat. Many investors said they were finally happy.
Hong Kong stocks also strengthened significantly. The Hang Seng Index closed up 9.08% at 200875 points, and stood at 20000 points again, the largest one-day increase since October 30, 2008; The Hang Seng technology index rose 22.2% to 424339, the largest one-day increase in history. Jingdong and meituan both rose by more than 30%, leading the rise of Hang Seng index components; Alibaba and Alibaba health rose more than 27%, Tencent and Netease rose more than 23%.
After the closing meeting of the State Council and the China Securities Regulatory Commission, the central bank and the China Securities Regulatory Commission successively held special meetings to convey the news and study the spirit of the A-share.
On the same day, the Ministry of finance also announced that considering all aspects of the situation, it does not have the conditions to expand the pilot cities of real estate tax reform this year.
real estate stocks rebounded strongly,
Ministry of finance’s latest response to real estate tax
On the evening of the 16th, according to Xinhua news agency, recently, Xinhua News Agency reporters interviewed the relevant person in charge of the Ministry of Finance on the pilot issue of real estate tax reform. The relevant person in charge said that the pilot of real estate tax reform was carried out in accordance with the authorization of the Standing Committee of the National People’s Congress. Some cities have carried out investigation and preliminary research, but considering all aspects of the situation, they do not have the conditions to expand the pilot cities of real estate tax reform this year.
On the 16th, the real estate sector of A-Shares and Hong Kong shares set off a strong rebound, in which the mainland real estate index of Hong Kong shares rose by nearly 10% and the real estate sector of A-Shares rose by 3%.
In terms of individual stocks, A-Shares Sundy Land Investment Co.Ltd(600077) , Macrolink Culturaltainment Development Co.Ltd(000620) , Tahoe Group Co.Ltd(000732) limit; In terms of Hong Kong stocks, Xuhui holdings, Longguang group and China Olympic Park rose more than 20%. Rongchuang rose by more than 15% from a decline of nearly 20%, and closed up 7%.
According to the news on December 13, 2021 on the website of the National People’s Congress of China, on October 19, 2021, Minister of Finance Liu Kun explained the “decision on Authorizing the State Council to carry out the pilot work of real estate tax reform in some areas (Draft)” at the 31st meeting of the Standing Committee of the 13th National People’s Congress.
The main contents of the draft include that in terms of tax objects and taxpayers, rural homesteads and houses owned by law will not be included in the scope of pilot taxation. The scope of Taxation, tax basis, tax rate, tax preference and collection management of the pilot shall remain unchanged to ensure the shift of tax burden during the pilot period.
In terms of the determination of pilot areas, the State Council, in accordance with the principle of being positive and prudent, comprehensively considers deepening the pilot, unifying legislation and promoting the steady and healthy development of the real estate market, and determines the pilot areas, which shall be reported to the Standing Committee of the National People’s Congress for the record.
In terms of the pilot period and start-up time, the pilot period is five years. During the pilot process, the State Council will summarize the pilot experience in time and report the pilot situation to the Standing Committee of the National People’s Congress six months before the expiration of the authorization period. If it is necessary to continue the authorization, it can put forward relevant opinions for decision by the Standing Committee of the national people’s Congress. When conditions are ripe, laws shall be formulated in time. The starting time of the pilot implementation shall be determined by the State Council.
central bank, China Securities Regulatory Commission and China Banking and Insurance Regulatory Commission make a joint statement
On March 16, after the financial stability and Development Commission of the State Council held a special meeting, at noon on March 16, Comrade Yi Gang, President of the people’s Bank of China and director of the office of the financial commission, presided over a meeting of cadres at or above the department level, conveyed and studied the spirit of the 51st special meeting of the financial commission of the State Council, and studied and deployed the implementation work of the people’s Bank of China. Members of the party committees and vice presidents of the people’s Bank of China attended the meeting.
The meeting called on the people’s Bank of China to resolutely implement the decision-making and deployment of the CPC Central Committee and the State Council, resolutely improve its political position, resolutely implement the work requirements of the financial commission, actively act as, and implement the spirit of the central economic work conference and the deployment of the national “two sessions”. We will focus on economic development, adhere to high-quality development, deepen reform and expand opening-up, adhere to the principle of marketization and rule of law, and unswervingly protect property rights and the two. Monetary policy should be proactive, new loans should maintain moderate growth, vigorously support small, medium-sized and micro enterprises, firmly support the development of the real economy, and keep the economy running within a reasonable range. Adhere to seeking progress while maintaining stability, prevent and resolve risks in the real estate market, steadily promote and complete the rectification of large platform companies as soon as possible, promote the healthy and stable development of platform economy and improve international competitiveness. We will further strengthen inter departmental policy coordination, respond to hot issues of market concern in a timely manner, stabilize expectations, boost confidence, maintain the steady and healthy development of China’s economy, and jointly safeguard the stable development of the capital market.
According to the “CSRC release”, after the special meeting of the financial committee of the State Council was held on March 16, the Party committee of the CSRC quickly held an expanded meeting to convey and study the spirit of the meeting and make research and deployment on the implementation.
The CSRC is deeply aware that under the current complex situation, it is very timely and important for the financial commission of the State Council to hold a special meeting to study the current economic situation and capital market problems, which reflects the high attention paid to the work of the capital market, fully responds to the concerns of the market, and the deployment has strong guidance and pertinence. Since the beginning of this year, China’s national economy has continued to recover, the main macroeconomic indicators have operated within a reasonable range, the steady growth policies in all aspects have continued to work, the performance of listed companies has been stable and positive, the stable operation of the capital market has a solid foundation, and the short-term fluctuation of the market has not and will not change the long-term healthy development trend.
Under the unified command and coordination of the financial commission of the State Council, the CSRC will earnestly implement the deployment of the central economic work conference and the national “two sessions”, adhere to the principles of deepening reform and opening up, adhere to the principles of marketization and rule of law, actively strengthen communication and coordination with macroeconomic management departments and industry competent departments, maintain the stability and consistency of policy expectations, and help stabilize the macro-economic market and financial operation. We will implement the tasks of the government work report, solidly promote the reform of the stock issuance registration system, improve the bond financing support mechanism for private enterprises, and promote the development of venture capital. Give play to the role of the endogenous stability mechanism of the market, vigorously promote listed companies to improve the quality, encourage listed companies to increase their holdings and repurchase, and guide fund companies to purchase their own shares.
Improve the system and mechanism conducive to the participation of long-term institutional investors in the capital market, increase the cultivation of public funds and other institutional investors, and encourage long-term investment and value investment. We will further promote high-level opening to the outside world, strengthen practical cooperation between the mainland and Hong Kong’s capital markets, and jointly safeguard the healthy and stable development of the Hong Kong market. Continue to strengthen communication with US regulators and strive to reach an agreement on China US audit and supervision cooperation as soon as possible. We will promptly promote the implementation of new regulations on the supervision of overseas listing of enterprises, support all kinds of qualified enterprises to list abroad, and maintain smooth channels for overseas listing. Continue to support the rational financing of the real economy, actively cooperate with relevant departments, effectively resolve the risks of real estate enterprises, promote the standardized and healthy development of platform economy and improve international competitiveness.
Next, in accordance with the deployment requirements of the financial commission of the State Council, the CSRC will effectively improve its political position, closely follow the theme of promoting high-quality development, further deepen and refine various work measures, strive to achieve results, and make every effort to maintain the smooth operation of the capital market.
On the morning of March 16, Guo Shuqing, Secretary of the Party committee and chairman of the cbcirc, presided over a special meeting to convey, study and implement the spirit of the meeting of the financial committee of the State Council, and make arrangements for the next step of banking and insurance supervision.
The meeting pointed out that the CBRC system should deeply understand the great significance of the “two establishment”, resolutely achieve the “two maintenance”, and quickly integrate ideas and actions into the Party Central Committee’s analysis, judgment, decision-making and deployment of the situation. We should resolutely implement the spirit of the central economic work conference and the deployment of the national “two sessions”, shoulder the responsibility of stabilizing the macro economy, adhere to development as the first priority of the party in governing and rejuvenating the country, focus on economic construction, deepen reform and opening up, adhere to the principles of marketization and rule of law, adhere to the “two unwavering”, earnestly protect property rights, coordinate epidemic prevention and control and economic and social development, and continuously improve the forward-looking effectiveness of supervision, We will deepen the reform and opening up of the banking and insurance industry, strive to promote high-quality economic and social development, and firmly hold the bottom line of no systemic financial risks.
The meeting stressed that we should fully support the stabilization of the macro-economic market and promote the economic operation within a reasonable range in accordance with the requirements of stability and seeking progress in stability. We should guide banking and insurance institutions to proceed from the overall situation and firmly support the development of the real economy. Meet the reasonable financing needs of market subjects, increase financing supply, and maintain a moderate increase in new loans. Promote the financing increment, expansion and price reduction of small, medium-sized and micro enterprises. All departments and local offices should encourage banking and insurance institutions to innovate, support national scientific and technological research, and better serve key core technology research enterprises and “specialized and special new” enterprises. Improve the quality and efficiency of financial services and rural revitalization, and help “new citizens” live and start businesses in cities and towns. We will continue to standardize the development of the third pillar of old-age insurance and promote the improvement of health insurance services. We should adhere to the positioning that houses are used for living rather than speculation, continue to improve the long-term mechanism of “stabilizing land prices, house prices and expectations”, actively promote the transformation of the development mode of the real estate industry, encourage institutions to carry out M & A loans in a stable and orderly manner, focus on supporting high-quality real estate enterprises and acquiring high-quality projects of difficult real estate enterprises, and promote the virtuous circle and healthy development of the real estate industry. We should improve the established plan in accordance with the principles of marketization, legalization and internationalization, adhere to seeking progress while maintaining stability, steadily promote and complete the rectification of large platform companies as soon as possible through standardized, transparent and predictable supervision, and set up red and green lights to promote the steady and healthy development of platform economy and improve international competitiveness. We should strengthen communication and cooperation with Hong Kong’s financial regulatory authorities and support the healthy development of Hong Kong’s financial market.
The meeting called for active support for the smooth operation of the capital market. Actively introduce policies favorable to the market. We should vigorously support direct financing and promote the optimization of financing structure. We will become the backbone of professional investment and financial management institutions to promote the long-term development of the capital market. We should give full play to the advantages of long-term investment of insurance funds and guide insurance institutions to allocate more funds to equity assets. Support insurance companies to increase capital market investment, especially stock investment of high-quality listed companies, through various channels such as direct investment, entrusted investment and public funds. We should strengthen the issuance of equity asset management products, support financial management companies to increase the proportion of equity products, and insurance institutions to issue portfolio products. We should timely respond to hot issues concerned by the market and stabilize market expectations. We should actively strengthen communication and coordination with relevant departments to form a joint force to maintain the stability and consistency of policy expectations.
Comparing the contents of the meetings of the central bank and the China Banking and Insurance Regulatory Commission, it can be found that both departments mentioned the need to further strengthen inter departmental communication and coordination, timely respond to hot issues concerned by the market and stabilize market expectations.
Institution: A-share valuation is below the historical average
Due to the sharp decline in recent days, the overall valuation of a / H shares has become attractive. As of March 15, the price earnings ratio of the Shanghai composite index was 11.6 times, which was at the 10% quantile level in recent five years. In the longer term, it was lower than the valuation level of the Shanghai composite index at 1664 points in 2008 (13.5 times). The overall P / E ratios of SSE 50 and SSE 180 are 9.5 times and 9.4 times respectively, which are also in the historical low quartile.
Gf Securities Co.Ltd(000776) said that the valuation of A-Shares has been below the historical average and has medium and long-term allocation value.
Guosheng Securities believes that with the gradual easing of the international situation and the imminent landing of the boots of the Federal Reserve’s monetary policy meeting on Thursday morning (the basis point of the first interest rate increase and the guidelines for the subsequent interest rate increase and contraction will be announced), the A-share market may usher in an oversold rebound after a continuous bottom.
For the current capital market, many professional institutions still insist on doing what they think is “the right thing”. According to incomplete statistics, since this year, more than 40 public fund companies have initiated self purchase, and the actual self purchase amount has exceeded 1.3 billion yuan. Private placement is not inferior. Since this year, more than 10 private placement companies have purchased nearly 1.4 billion yuan. In addition, recently, two 10 billion private placement companies are actively preparing to issue new products.
After trading on March 16, Chen Guangming’s Ruiyuan Fund announced that based on confidence in the long-term, stable and healthy development of China’s capital market, the company will use its inherent funds to purchase its public funds within 10 trading days from March 18 (inclusive), with a total amount of no less than 150 million yuan and a holding time of no less than five years.
In addition, Ruiyuan fund also sent a letter to investors: fear should not occupy the heart at this moment.
In addition to professional institutions, on the morning of the 15th, Duan Yongping, an investment tycoon known as “China Buffett”, spoke with his account in a stock community and said: “tomorrow, I’m going to exchange BRKB (Berkshire Hathaway) (Tencent holdings ADR). It won’t wait.”
On the 15th, Tencent holdings, a Hong Kong stock, fell 10% to HK $300 per share, a three-year low. However, Tencent holdings opened nearly 6% higher and closed up 23%.
