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".
internal and external anxiety factors are fully clear, irrational emotion venting is over
1) the FSC meeting comprehensively responded to concerns and made clear determination to stabilize the capital market this week's special meeting of the financial stability and Development Committee focused on issues including macro-economy, real estate regulation, medium concept supervision, platform economy supervision and the stability of Hong Kong's financial market, basically covering all the concerns of the recent market. After the meeting, all national ministries and commissions related to economic and financial work came forward and made a voice to resolve the risks of the real estate market, support long-term money into the market, strengthen cross-border regulatory communication, and temporarily not expand the pilot of real estate tax reform, which responded to the focus issues of market concern. The meeting of the financial stability committee played three roles: first, the top decision-making level once again emphasized the important role of capital market stability in steady growth and long-term economic development, and reiterated the importance of capital market; Second, make market participants fully aware that relevant departments will pay timely attention to and follow up the pessimism and panic factors in the current capital market, and various departments will continue to strengthen the coordination and consistency of policies; Third, it once again reflected the bottom line thinking of the decision-making level, gave investors in panic a very clear "anchor" of the market index, and reversed the general irrational selling phenomenon in the past two weeks.
2) irrational panic factors caused by the conflict between Russia and Ukraine were eliminated after the call between Chinese and American leaders recently, China has made a lot of efforts at the diplomatic level to defuse the previous irresponsible exaggeration of Western media. On March 14, Yang Jiechi, director of the office of the Central Foreign Affairs Working Committee, met with Sullivan, assistant to the president of the United States for national security affairs, and stressed that China is committed to promoting peace and talks. The international community should jointly support the Russian Ukrainian peace talks to achieve substantive results as soon as possible and promote the cooling of the situation as soon as possible. On March 15, Chinese ambassador to the United States Qin Gang published a signed article entitled "our position on the Ukrainian issue" in the Washington Post, saying that the so-called Chinese side's prior knowledge, "acquiescence" and "connivance" are completely false information, and it is impossible for China to refuse to dissuade without knowing it. On March 18, general secretary of the CPC Central Committee and president Xi Jinping had a video call with US President Biden at request. The two heads of state had a frank and in-depth exchange of views on issues of common concern such as China US relations and the situation in Ukraine. Historically, the communication between the heads of state of China and the United States during the critical period has played a positive role in boosting market expectations.
the overall economic situation is stable, and the impact of follow-up epidemic control measures on the economy will gradually weaken
1) the economic data of the first two months show that the economy is still resilient, and the policies in the real estate field still need to be strengthened in the first two months, the year-on-year indicators of some economic data greatly exceeded the market expectations. In the first two months, the industrial added value increased by 7.5% year-on-year, the growth rate of manufacturing investment reached 20.9%, and even the weak social zero also increased by 6.7% year-on-year. With regard to the data estimation gap concerned by the market, the macro group of Citic Securities Company Limited(600030) research department believes that price factors, structural factors and abnormal base effect after the epidemic are the reasons why the market generally miscalculated the economic data of the first two months. From the perspective of absolute volume and month on month comparison, the economic data of the first two months are generally in line with micro perception. Although the macro-economy has shown a stable trend in the first two months on the whole, the potential risks in the real estate field still exist. In February, the central bank announced that the medium and long-term loans of households decreased by 45.9 billion yuan. The history of the net decline of medium and long-term loans of households is rare. In some regions, the use of low-cost small and micro business loans to replace housing mortgage loans has occurred, and the willingness of residents to actively purchase houses is still insufficient. The overseas debt pressure of real estate enterprises is still large. From early March to 18th, Markit iboxx Asia Chinese dollar high-yield bond index and real estate bond index fell by 11.0% and 16.2% respectively, and the corresponding yield to maturity is still as high as 22.8% and 23.5%. If domestic financing cannot be dredged, the pressure on the follow-up capital chain will continue.
2) the guidelines for epidemic prevention and treatment have been continuously optimized, and the negative impact on the economy will be gradually weakened in the future since March this year, 925 local confirmed cases have been added daily, and the pressure of prevention and control has been increasing. Nevertheless, we still see the national level polar adjustment of epidemic prevention and treatment measures, and constantly reduce the negative impact of epidemic prevention and control on the real economy. On March 14, the National Health Commission released the ninth edition of covid-19 pneumonia diagnosis and treatment plan, which makes adjustments in case detection, classified admission, isolation management and antiviral treatment more scientific, accurate and targeted. On March 17, the Standing Committee of the Political Bureau of the CPC Central Committee held a meeting to emphasize the overall planning of epidemic prevention and control and economic and social development, take more effective measures, strive to achieve the maximum prevention and control effect at the least cost, and minimize the impact of the epidemic on economic and social development. For small and medium-sized enterprises that may be affected by the epidemic, the policy side continues to increase support; On March 18, the Ministry of Finance and the State Administration of Taxation issued the announcement on further implementing preferential income tax policies for small and micro enterprises, which further increased tax relief for small and low profit enterprises.
overseas interest rate hikes and Russia Ukraine conflicts have been implemented one after another, negative impact has been weakened
1) the Federal Reserve raised interest rates, and the market has a clear expectation of the path of interest rate increase and table reduction during the year.
3 on 17 March, the Federal Reserve officially raised the benchmark interest rate by 25 basis points, revised the statement of economic outlook, and made clear the matters related to the reduction. This dot matrix chart shows a more hawkish path. It is expected that the Federal Reserve will raise interest rates seven times in 2022, significantly higher than the three times proposed in December 2021. In view of the hawkish dot matrix, the macro group of Citic Securities Company Limited(600030) research department believes that this does not reflect the real path of interest rate increase of the Federal Reserve this year. It is still the means for the Federal Reserve to manage inflation expectations in the face of high inflation and downward pressure on the economy. Maintain the previous view that the current federal reserve action lags behind the inflation curve for 2-3 quarters, and the pace of interest rate increase this year is first urgent and then slow. It is expected that the number of interest rate increases in the whole year will be 5-6. If U.S. inflation continues to rise in the future, Then there is the possibility of raising interest rates by 50bps at the interest rate meeting in May, the end height of this round of interest rate increase will be around 2%, and the nominal yield of 10-year US bonds may reach 2.5% within this year.
2) the evolution of the conflict between Russia and Ukraine is becoming increasingly clear and is tending to reach an agreement 3 on 16 March, Russian President Vladimir Putin attended the federal conference on social and economic assistance and delivered a televised speech. In his speech, in addition to indicating Russia's position in the current conflict between Russia and Ukraine, Putin expressed the unprecedented pressure faced by Chinese financial companies, large enterprises and small and medium-sized enterprises caused by Western trade and financial sanctions against Russia, The sanctions led to the rapid rise of inflation and unemployment in Russia and China in the short term. The speech can reflect that the current Western sanctions have impacted the normal operation of Russia and China's economy from many angles, and Russia is also urgent to reach an agreement with Ukraine. According to China Central Television News on March 19, the head of the Russian delegation to the Russian Ukrainian negotiations, mezinski, said on March 18 local time that Ukraine's neutral status and its failure to join NATO are the core topics of the Russian Ukrainian negotiations. At present, the positions of the two sides on this issue have been reached to the greatest extent.
A-share market returns to normal, grasp the resonant rising market of value growth
1) liquidity pressure has eased significantly, and the market as a whole is in the range of low valuation according to the channel investigation of Citic Securities Company Limited(600030) the net redemption rate of the surviving public fund in the past week was about 7%, which was relatively stable. Active private placement positions fell sharply last week, with a decline of 4 percentage points in a single week, corresponding to the net outflow scale of about 100 billion. The continuous net outflow scale of allocated foreign capital also reached the historical limit on Wednesday, and the cumulative net outflow scale from March 4 to March 16 reached 36.3 billion yuan. With the active market and the position of funds falling to a relatively safe position in history, the market liquidity pressure has been significantly relieved this week. After the meeting of the financial stability Committee, the China concept 100 index and the Hang Seng technology index rebounded 45% and 29% respectively from their lows, which greatly impacted the overseas short positions. The market repurchase volume and shareholders' share increase plan have increased significantly recently. Since March, the repurchase scale has reached 7.53 billion yuan, the highest level in six months. Some growth sector leaders with high valuation at the beginning of the year also generally entered the reasonable range of valuation. Taking the companies mainly covered by Citic Securities Company Limited(600030) research department as the sample, the predicted valuations of semiconductors, military industry, new power systems, new energy and intelligent vehicles in 2022 have been reduced to 42 times, 32 times, 18 times and 36 times respectively, corresponding to the predicted profit growth of 35.0%, 43.0%, 15.9% and 52.3% in 2022.
2) after the return of A-Shares to normal, we will continue to stick to the main line of steady growth and focus on the balanced layout of "two low positions" 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 short-term impulse venting of extreme emotions. It is suggested that investors continue to follow the main line of "steady growth" and focus on the balanced layout of "Two Lows", including: varieties with relatively low fundamental expectations, and focus on the allocation opportunities of midstream manufacturing suppressed by cost problems after commodity prices peak, such as smart cars and parts , photovoltaic wind power equipment etc, aviation and Hotel ; Among the varieties with relatively low valuations, it's recommended to focus on quality developers, building materials and household businesses that are expected to take credit risks from the real estate, quality developers, building materials and household businesses after the expected release of the expected release from the expected release of the credit risk of the real estate, quality developers, building materials and household businesses, \ data center and cloud infrastructure , fine chemical enterprises with the ability to develop new businesses such as new materials. In addition, the recent focus can be focused on a quarterly expected to exceed the expected varieties, it is recommended to focus on the best lithium electric , photovoltaic , semiconductor , Baijiu , traditional Chinese medicine , building and corrosion sector in the first two months.
risk factors
Global epidemic recurrence; The friction between China and the United States in the field of science and technology trade has intensified; The progress of China's economic recovery is less than expected; Macro liquidity at home and abroad tightened more than expected.
