The stock index fell 1.77% this week. How will A-Shares run next week? We have summarized the latest investment strategies of major institutions for investors’ reference.
Xingzheng strategy: “policy bottom” + “market bottom” has grasped the repair window
With the continuous release of China’s policy warmth, the currency and credit are expected to be loose. At the same time, the risks of overseas stagflation, interest rate hike, foreign capital outflow and China concept stock supervision are expected to be alleviated. The bottom of the market has appeared and will usher in a repair window. In terms of operation strategy, on the one hand, the pressure of scientific and technological growth, regardless of valuation or congestion, has been significantly improved, and the deterministic direction of performance (photovoltaic, semiconductor, energy storage, etc.) is configured at the bottom of the emotional repair window; On the other hand, the direction of “steady growth” is clear, and there is still room for repair in banks, real estate, etc. The two sessions and the meeting of the Finance Committee continue to release the signal of “stable growth”, and the pattern of “external chaos and internal stability” is determined. The sectors of state-owned enterprises, real estate, infrastructure, banks and securities companies are both safe and policy driven. For scientific and technological growth, combined with the ten indicators we previously proposed, the relevant sectors have entered the bottom area. At present, we can make a deep rebound along the photovoltaic, wind power, semiconductor and other sectors with strong performance certainty. At the same time, we can also find “small high-tech” from bottom to top based on the medium-term business trend and profit growth in the bottom area.
CITIC strategy: return to normal and grasp the resonance rising market
The internal and external anxiety factors were fully clear, and the venting of irrational emotions ended; The overall economic situation is stable, and the impact of follow-up precise epidemic control measures on the economy will gradually weaken; The implementation of overseas interest rate hikes and the conflict between Russia and Ukraine are becoming clearer, and the negative impact has been weakened; The A-share market returns to normal and grasps the resonant rising market of value growth. First, the FSC meeting comprehensively responded to market concerns and made a clear determination to stabilize the capital market; After the call between Chinese and American leaders, the irrational panic factors caused by the conflict between Russia and Ukraine were eliminated. Secondly, the economic data of the first two months show that the economy is still resilient, policies in the real estate field still need to be strengthened, epidemic prevention and control and diagnosis and treatment guidelines continue to be optimized, and the negative impact on the economy will gradually weaken in the future. Thirdly, the Fed’s interest rate hike has landed, the market has a clearer expectation of the path of interest rate hike or table contraction during the year, and the evolution of the conflict between Russia and Ukraine is becoming increasingly clear, or is tending to reach an agreement. Finally, after the meeting of the financial stability Committee, the liquidity pressure was significantly relieved, and the market as a whole was in the range of low valuation. On the whole, under the superimposed influence of internal and external anxiety factors, the A-share market will return to the normal driven by fundamental logic after the pulse venting of short-term extreme emotions. It is suggested to continue to adhere to the main line of steady growth and focus on the balanced layout of “two low levels”.
CICC strategy: A-share market enters the bottom grinding stage
We judge that although there are still repeated risks in the short term, there is no need to be overly pessimistic about the future performance of a shares. In the near future, the market may be in the bottom grinding period, the trading volume may shrink, and the stage similar to the sharp decline in the early stage may have ended. In the medium term, we believe that the Chinese market is expected to show relative resilience: China is in a relatively favorable growth and policy cycle, and there is relatively sufficient policy space for “steady growth”; Secondly, the absolute valuation of China’s market is at a relatively low historical level, which is also attractive compared with other major markets; China’s inflation pressure is relatively controllable. As an important manufacturing country in the world, China has the largest and relatively complete industrial chain in the world. As long as China continues to pursue scientific and technological innovation and industrial upgrading, the Chinese market may be relatively more resilient in the global supply risk. Structurally, we believe that the main line of “stable growth” may still have allocation value. In the future, with the gradual mitigation of “stagflation” risk and supply risk at the overseas macro level, the growth expectation will gradually stabilize, and the growth style with high prosperity is also worthy of gradual attention.
Monarch strategy: Dawn returns to shock
The market bottomed out and rebounded this week, and the Shanghai composite index returned to 3200 points, which is mainly due to the preliminary correction of the pessimistic expectations of the market at the special meeting of the financial stability Commission. Since March, domestic and foreign negative impacts have continued, overseas geopolitical conflicts, rising bulk prices, rising inflation, China’s credit data are lower than expected, the epidemic has spread rapidly, market expectations have continued to weaken, and finally pessimistic expectations and stock price decline have gradually formed a negative spiral. This meeting is a pair of drug introductions expected to be repaired by the market, which has re established confidence for the market. In the future, we believe that under the catalysis of Jinwen, the market is expected to return to shock consolidation in the short term from the state of sharp decline, but the opportunity of trend still needs to wait. 1) Molecular side: a complete prescription still needs to wait. There is still a vague and effective way for investors to express their “stable economic expectations” from the “stable economic expectations” to the “stable economic expectations” at the current level. 2) Denominator end: it is still the medium-term constraint of the market. On Thursday, the Federal Reserve raised interest rates by 25bp, and short-term concerns fell to the ground, but in the future, the uncertainty of the pace of interest rate increase and table contraction is still high. The cloud meeting between China and the United States on Friday released positive signals, but there was still no significant marginal improvement in overseas geopolitical conflicts and Sino US frictions. On the whole, there is no real steady growth, the epidemic situation is repeatedly intertwined, the high uncertainty of overseas liquidity and the disturbance of geographical conflicts. At present, it is difficult to see the signal of trend reversing expectations due to the decline of profit expectations, the rise of discount rate expectations and high volatility faced by investors in stock pricing. After the end of the policy, A-Shares returned to shock.
Guosheng strategy: rebound or reversal?
We have discussed in the previous report that the policy will take effect with a high probability from the end of the policy to the end of the market, but there is no clear time lag relationship. The core of the reversal of the market trend lies in whether the implementation effect of the policy can really solve the core contradiction at that time. Referring to 2018, how is the downward trend of the market reversed? At the end of July 2018, the meeting of the Political Bureau of the CPC Central Committee proposed “six stabilities”, the end of macro policy appeared, and the market changed from unilateral decline to weak shock; From October to November, vice premier Liu He and his party and the two sessions expressed their support for the capital market. The market started a monthly rebound, and then bottomed out twice; Until the beginning of 2019, the central bank comprehensively lowered the reserve requirement to confirm the lowest point of the index, and then the credit data in January was much higher than expected, and the main rising market was established. For the moment, the possibility of a second bottom dip cannot be ruled out until there is a substantial improvement in “internal stagnation” + “external inflation”.
West China strategy: how far is this round of “oversold” rebound expected under the expectation of reducing reserve requirements and interest rates?
After the “policy bottom” is proved, A-Shares are expected to continue the “oversold” rebound. Since the beginning of this year, the market has continued to decline, due to the interference caused by the deterioration of the external geographical environment, the instability of China’s macro policy expectations, the abnormal fluctuation of China concept shares, the reflection of Internet platforms and real estate problems in the capital market and other factors. Recently, the financial commission of the State Council, the “one bank, two sessions”, the foreign exchange administration held a meeting, the postponement of the real estate tax, and then the video call between the heads of state of China and the United States, the pessimistic expectations of the market have been repaired, and the Shanghai index is near Wuxi Boton Technology Co.Ltd(300031) 00 points or a relatively solid bottom. Under the monetary policy pattern of “external tightening and internal loosening”, there is still room for China to cut reserve requirements and interest rates, and A-Shares are expected to continue the “oversold” rebound. How far this round of market goes depends on multiple factors: on the one hand, the strength and sustainability of China’s care policy; On the other hand, we should pay attention to peripheral factors such as the pace of the Fed’s table contraction and geographical relations. In terms of industry allocation, pay attention to three main investment lines: first, the marginal relaxation of benefit policies, such as “banking and real estate”; Second, “agriculture and gold” benefiting from inflation expectations; Third, the theme of policy (support) promotion is related to “new energy (photovoltaic, energy storage), semiconductors, counting from the east to the west”, etc.
China Securities Co.Ltd(601066) strategy: similarities and differences between the current market and the “policy bottom” in 2018
Several meetings such as the financial committee were held one after another, marking that the end of the current round of decline policy has appeared, market confidence has been repaired and the deterioration of liquidity has been alleviated.
Other factors of market concern have also improved significantly, such as the change of epidemic prevention ideas, the improvement of the external environment, the easing of depreciation concerns, etc. Our view of the market has changed from cautious to neutral in the medium term and optimistic in the short term. A better segment of quarterly performance is expected to focus on high-end manufacturing (new energy, semiconductor, military industry) and cycle (coal, non-ferrous metals, shipping), and consumer sectors, such as Baijiu, CXO and in vitro testing. Generally speaking, our view of the market in the medium term has changed from cautious to neutral, and we are optimistic in the short term, but we should have reasonable expectations for the follow-up space of the rebound, focusing on grasping the structure. At present, key industries are medicine, electronics, banking, agriculture, forestry, animal husbandry and fishery, military industry, new energy, etc.
National and overseas strategy: current allocation ideas from previous foreign capital outflow behavior
There are four key factors that determine the outflow of foreign capital. One is to stop the profit at different stages. For example, in April 2019 and July 2020, foreign capital chose profit taking after the rapid rise of a shares; Second, the impact of sudden risk events, such as the outbreak of the epidemic or the impact of periodic events in China US relations; Third, the US bond interest rate rises rapidly, and the global equity market is usually risk-off; Fourth, there was a liquidity crisis in the US dollar, the US dollar index rose significantly, and emerging market funds flowed out sharply. Compared with the previous range and duration of foreign capital outflow, the current round of large foreign capital outflow is coming to an end. With the sound of the golden stability meeting, the setting tone of the first video call between China and the US dollar and the gradual clarification of the situation in Russia and Ukraine, the cost performance of A-Shares is prominent, and there is a great possibility of foreign capital re inflow. In the follow-up, we need to focus on the interpretation of US bond interest rate. The negative factors of the continuous blood loss of foreign capital are expected to be alleviated and the judgment that the market will usher in an oversold rebound is maintained. It is recommended to choose the growth sector with sufficient early adjustment and slow down the reduction of foreign capital. The performance is expected to continue to improve, focusing on the digital economy and new energy fields catalyzed by strong industrial cycle, such as photovoltaic, energy storage, semiconductor, medicine and biology.
Western strategy: what direction should we pay attention to in the post epidemic era
In the first half of the year, the policy window period is opening, and the correction of deviation market is on the way. With the easing of concerns about the conflict between Russia and Ukraine and the landing of the Fed’s interest rate hike boots, the liquidity pressure that the market has been worried about for a long time is expected to ease in stages, and the global risk assets are expected to usher in a breathing period. Affected by the strong stability maintenance signal released by the special meeting of the financial stability and Development Commission, combined with the video meeting of the China US Summit on Friday, the market’s early concerns about China concept stocks and Hong Kong stocks have been greatly alleviated, and the A-share market sentiment is expected to be further repaired. With the arrival of the disclosure period of the annual report and the first quarterly report, the performance of the growth sector is significantly stronger than the market, and the correction market has been quietly started in the market adjustment. In addition to the growth style, offline economic recovery and essential consumer goods often lead the market rebound.
Livelihood Strategy: step by step is better than easy to win
The market fluctuated greatly this week, with a V-shaped rebound. From March 14 to 15, major broad-based, style and industry indexes fell sharply. On the occasion of the sharp retreat of the market, on March 15, we released the “battle against a backwater” and firmly bullish: we believe that the liquidity shock will eventually pass, and the emphasis on the “resilience” of economic data does not necessarily mean that the “steady growth” policy does not need to be strengthened, and the policy space implied by China’s low inflation level is the cornerstone of optimism about the future market. Subsequently, with the convening of the special meeting of the Financial Committee on March 16, we issued “chasing after the victory” and suggested that investors continue to rebound. Major broad-based, style and industry indexes rose sharply on and after March 16. In the follow-up, with the release of policy risks at home and abroad, the moment of the greatest impact may pass, and the bottom of the market based on short-term pessimism has been confirmed.
