Key investment points
Last week (3.28-4.1), the stock index opened low, the Shanghai index rose 2.19% to close at 3282.7 points, the Shenzhen Component Index rose 1.29% to close at 1222793 points, the small and medium-sized 100 rose 0.99%, and the gem index rose 1.10%; In terms of industry sectors, real estate, building materials and banks led the increase; In terms of theme concepts, Lianban index, Fujian free trade zone index and Guangdong, Hong Kong and Macao free trade zone index led the increase; The average daily turnover of Shanghai and Shenzhen stock markets was 927.49 billion, with a decrease of 2.56% compared with the previous week, including a decrease of 1.22% in Shanghai and 3.53% in Shenzhen; In terms of style, large cap stocks have a comparative advantage, with Shanghai Stock Exchange 50 up 3.04% and China Stock Exchange 500 up 1.54%; In terms of exchange rate, the closing point of US dollar against RMB (CFETS) was 6.3591, down 0.10%; In terms of commodities, icewti crude oil fell 12.68%, Comex gold fell 0.36%, Nanhua iron ore index rose 10.02%, and DCE coking coal rose 5.89%.
The market continues to grind bottom. At the recent national standing committee meeting, it was proposed that "we should stick to the annual development goals, put steady growth in a more prominent position, make policies to stabilize the economy sooner and faster, do not take measures that are not conducive to stabilizing market expectations, and formulate plans to deal with possible greater uncertainty". We believe that the follow-up steady growth policy still has the possibility of exceeding expectations, especially in the field of infrastructure. However, after several rounds of real estate stimulation, the current round of real estate policy is unlikely to be fully liberalized. Different from the previous rounds of real estate policies, we expect the state to relax the real estate policy gently, gradually and tentatively. When the policy effect can basically reverse the negative feedback of the real estate industry, the policy strength will stop. This also determines that the current round of economy, performance and market probability will fluctuate in the bottom range for a long time, and the market index rebound is difficult to achieve overnight.
The risk of zhonggai shares subsided and the sentiment of A-share market warmed up. We expect the fed to raise interest rates at a fast pace and then at a slow pace, so as to curb the negative feedback effect caused by severe inflation expectations. It does not rule out the possibility that the pace of the Fed's interest rate hike in the next few times exceeded market expectations. From the perspective of DCF model, the trend of technology stocks and track sectors with cash flow concentrated in the long term is likely to be under pressure, while the cash flow concentrated in the recent high dividend and high dividend sectors may regain the favor of funds. With the Fed officially entering the interest rate hike cycle, the global market will usher in a style switch from the growth sector to the value sector. From China's historical experience, when the currency is wide, the financial system has abundant funds, and the market style tends to science and technology, track and theme investment; When credit is relaxed, the financing demand of the real economy picks up, the performance bottoms out, and the sectors with marginal performance improvement usually perform well. The market style is mainly good for blue chip sectors such as infrastructure, real estate and manufacturing. In the second quarter of 2022, the tightening of peripheral liquidity will bring some constraints to the easing of China's monetary policy. It is unlikely that China will continue to cut interest rates sharply, but the policy may continue to encourage the credit expansion of the real economy. The main goal of China's monetary policy in the second quarter is to broaden credit. The A-share market may continue the blue chip style of real estate, infrastructure, finance and other sectors.
Investment advice. Under the background of Chinese residents' savings moving and the accelerated listing of high-quality assets under the registration system, A-Shares are ushering in a new era of long bull and slow bull. At present, the price earnings ratio valuation of the A-share market is at a historical low, and the medium and long-term funds usher in a better layout time point. We expect that the market will gradually grind to the bottom from March to April. However, considering the large suppression of A-Shares at the performance end this year, the market probability is expected to show a U-shaped trend this year (the bottom is relatively flat). From Merrill Lynch clock, we expect that in the second quarter of 2022, it will be difficult for the A-share market to go bull sharply, but there are still structural opportunities in the A-share market. It is suggested to pay attention to: (1) cash assets. The Fed officially started raising interest rates, and the market may shift from growth style to value (high dividend) style. It is suggested to pay attention to high dividend and high dividend assets such as coal, real estate, banks, (Chinese prefix) construction, hydropower and communication operators. (2) Dilemma reversal sector, such as pig breeding sector with reversed industrial cycle. (3) A sector with booming production and marketing. In the next 1-2 quarters, the performance improvement expectations from strong to weak are: national defense and military industry, household appliances, transportation, communication and computer. (4) New energy and other track stocks. New energy and other track stocks are still in the stage of industrial explosion, and there are still certain investment opportunities, focusing on track stocks with performance support.
Risk tip: macroeconomic downturn, recurrence of the epidemic, fluctuations in overseas markets, deterioration of China US relations and risks in emerging market countries.
