Why did A-Shares plummet? How to go in the future?
In the new year, the Hang Seng tech index fell by 3.09% and the Shanghai and Shenzhen stock index fell by 24.03% in March, while the Hang Seng tech index fell by 3.04% in the new year.
In terms of sectors, most A-share sectors fell on the same day, while warehousing and logistics, agriculture, prefabricated vegetables, gold and other sectors rose against the trend. The real estate sector, lithium, rare earth, digital currency, photovoltaic, semiconductor and other sectors pulled back sharply. Among heavyweights, Kweichow Moutai Co.Ltd(600519) fell 3.59%, Wuliangye Yibin Co.Ltd(000858) fell 4.32%, Contemporary Amperex Technology Co.Limited(300750) fell more than 7%.
After hours, 11 fund companies including Boshi fund, Huaxia Fund, Ping An fund, Qianhai open source fund, Cinda AoYa fund, SDIC UBS fund, Nord fund, Societe Generale fund, Shanghai Investment Morgan fund, Jinxin fund and Hang Seng Qianhai fund made comprehensive comments on the performance of the A-share market. The public offering respondents generally believed that the sharp adjustment of the market on April 11 was due to the centralized fermentation of multiple factors, which triggered the selling of funds. The market bottomed out in the short term and waited for the implementation of multiple favorable policies for a long time.
three major disturbing factors caused the market to fall sharply
Since the beginning of the year, A-Shares have been adjusted for many times and have been adjusted for a long time, but they fell sharply again on April 11. The reporter found that multiple bad news fermented intensively over the weekend, and A-Shares were under pressure again, triggering a capital sell-off.
first of all, the fluctuation of economic data has aroused market concern Cinda Australia Fund pointed out that the higher than expected inflation data triggered the correction of the market’s medium-term liquidity expectations. On April 11, the data released by the Bureau of statistics showed that in March, CPI increased by 1.5% year-on-year and PPI increased by 8.3% year-on-year, both exceeding market expectations, and the ppi-cpi scissors gap fell back to the level from April to may last year.
The interest rate of 10-year US Treasury bonds rose to 2.78%, and the interest rate spread of China US 10-year Treasury bonds reversed for the first time since 2010. UBS fund of SDIC believes that the upside down of interest rate difference between China and the United States has exacerbated the panic of foreign capital. As of the close, the net outflow of funds going north was 5.76 billion yuan. Cinda Australia Asia Fund believes that with the recent release of stronger contraction signals from the Federal Reserve, inflation pressure appears under the influence of repeated outbreaks and conflicts between Russia and Ukraine, triggering the correction of the market’s medium-term liquidity expectations. Agriculture, forestry, animal husbandry and fishery sector rose against the market trend, which also reflected that the market began to pay more attention to inflation. Societe Generale Fund believes that the upside down of interest rates will have an impact on market confidence. In this case, it is expected that the northbound funds that have obviously flowed out this year will be difficult to turn to re inflow in the short term.
secondly, the expectation of easing failed last weekend, causing the decline of weighted indexes such as real estate SDIC UBS believes that the recent statements of the national Standing Committee and national ministries continue to release the signal of stable growth, but the expected reduction of reserve requirements and interest rates did not appear, and the overall mood is still fragile. Cinda AoYa believes that the failure of loose expectations leads to the adjustment of the real estate chain. After the Jinwen meeting, the market confidence in the real estate sector continued to repair. On April 6, the executive meeting of the State Council pointed out that it was necessary to make timely and flexible use of a variety of monetary policy tools to trigger a rapid rise in the market’s expectation of loose monetary policy in the near future. With the failure of easing expectations over the weekend, the real estate chain has been significantly adjusted, which is also an important reason for the decline of the weighted index.
finally, some sectors fell sharply due to the disturbance of the epidemic Cinda Australia believes that the epidemic disturbs vehicle production and raises concerns about upstream demand for new energy. Shanghai, Jilin and Guangdong, where the epidemic was more serious in the early stage, are important production bases of passenger cars in China, accounting for more than 10% of the output. The repeated epidemic has also had a great impact on vehicle production. Affected by the epidemic prevention and control, it has driven the general adjustment of the new energy sector. Societe Generale Fund believes that the current market’s main concern about the epidemic lies in the poor operation of China’s logistics under the strict prevention and control policy, which has a serious impact on industrial production.
Huang Biao of Jinxin Fund believes that the extreme pessimism in the short term makes the funds continue to choose risk aversion at a low level. The average decline in the market is more than 3 points, especially in the high growth sectors such as TMT and new energy vehicles, with a decline of nearly 5 points.
short-term shock bottoms out and long-term wait for multiple favorable policies to be implemented
In the view of public funds, multiple bad conditions lead to pessimism on the emotional side, short-term shocks bottom, and long-term wait for multiple good policies to be implemented.
In the short term, Qi Teng, equity investment director of Hang Seng Qianhai fund, said that the decline in the market on April 11 was more due to sentiment and expected pessimism, which was a short-term factor. In the short-term panic environment, we should keep calm, think and focus on medium and long-term factors. In the short term, due to the disturbance of internal and external factors, the market is still at the bottom stage of shock in the short term. In the medium and long term, it is not pessimistic about a shares, focusing on the energy revolution dominated by new energy.
From the emotional point of view, Huaxia Fund believes that the market mentality is more cautious. The index is still in the process of finding the bottom. The internal and external uncertainty has significantly amplified the volatility in the market operation, but the correction of the index also makes the medium-term investment opportunities more obvious.
Qianhai open source Fund said that the phased market is still in a window of index shock consolidation and emotional repair.
Some short-term risks will continue to disturb market sentiment. For example, Qianhai open source Fund believes that under the continuous disturbance of risk factors such as high overseas inflation, rising expectations of the Federal Reserve’s interest rate increase and contraction, US stock fluctuations and the conflict between Russia and Ukraine, it is also difficult for the market to reverse the V-shape and move upward. Therefore, the probability of the index is still a shock consolidation market.
Morgan fund of Shanghai investment bank believes that the increase of risk sentiment superimposes certain changes in fundamentals, and the improvement of relevant factors still needs some time; In addition, under the game of stock funds, the phenomenon of rapid rotation of the industry may continue, and the market driven by events or news is relatively short, so it is not suitable to catch up.
In the long run, public funds are not pessimistic.
Huang Biao of Jinxin Fund believes that with the gradual effect of prevention and control measures and the gradual return of the economy to normal, the panic decline will be unsustainable. At present, the valuations of many high-quality growth stocks may have been in a state of oversold. Therefore, we should not continue to blindly avoid risks and fall at a low level, but the opportunity to make a bargain hunting layout for high boom tracks and high-quality growth assets. When the panic is released quickly, it will be the time to harvest the excess returns of science and technology growth stocks.
JP Morgan Fund believes that after the sharp general decline in the market on April 11, there may be a small rebound opportunity after the internal wrong killing of the target this week or after the mood stabilizes, but the shock may still be the normal in the short term. Investors should be more patient and deal with the adjustment of the market from a more medium – and long-term perspective.
Public funds believe that there are still multiple positive policies in the follow-up, which will be implemented one after another to gradually improve market sentiment. For example, Qianhai open source Fund believes that 1. The epidemic has exacerbated the downward pressure on the economy and increased the space and power for subsequent monetary and credit easing. 2. Real estate credit risk has been “removing thunder” in succession, and referring to historical experience, at least until the downward pressure on house prices is relieved, the real estate market will continue.
Subsequently, with the relaxation of real estate policy, there is room for further upward growth. 3. The decision-making level has a clear determination to maintain the stability of the capital market, and the central bank has also begun to solicit opinions on the financial stability law. Societe Generale Fund believes that the current market is facing great macro pressure, and further policy easing is expected to gradually consolidate the bottom of the market. This year, under various pressures at home and abroad, the confidence of market investors is weak, which means that the bottom building of the market will be a slow process.
Looking to the future, the Fed’s more hawkish policy is expected to lead to the adjustment of the short-term market, but it will eventually stabilize after the price is fully reflected. The Shanghai Investment Morgan Fund believes that under the strict prevention and control of dynamic clearing, the Chinese epidemic is expected to significantly improve the interference with production and transportation in the near future; At the same time, after the recent epidemic has a negative impact on the economy, the relevant policies may strengthen and accelerate the pace, which will help the A-share bottom recovery.
The medium and long-term fundamentals of the market are expected to remain stable. Huaxia Fund said that it is expected that the policy will be further overweight in the second quarter, the national standing committee will continue to deploy “stable growth”, some measures will be implemented in advance, the implementation of prudent monetary policy is expected to be further strengthened, and the economic downside risk will be effectively hedged. The upside down of interest rate difference between China and the United States is essentially determined by the upside down of inflation. RMB assets are still relatively attractive to the US dollar, which may not lead to significant fluctuations in exchange rate or substantial outflow of funds.
public funds are optimistic about “steady growth” and “growth”
public funds are optimistic about the performance of the two future sectors, among which the certainty of “steady growth” is relatively higher, and the valuation attraction of the growth sector is gradually increasing
Boshi Fund believes that current policy has not been further relaxed, and there has been no effective entry of incremental funds in the market. Since April, northbound funds have continued the net outflow trend of last month, and overseas funds are cautious about A-Shares as a whole. At present, the market is still in the data verification period of “steady growth”. In the absence of strong data indicating that the economy is strengthening, the probability of A-Shares will continue to fluctuate, and internal and external uncertainties will still affect its trend. To ensure the completion of the annual gdp5 With a growth target of about 5%, the short-term and medium-term certainty of the main line of “stable growth” is relatively higher, and we can still pay due attention to the opportunities in new and old infrastructure fields.
Ping An Fund believes that the gdp5 set by the two sessions The 5% growth target has not changed, and the policy commitments made by the finance committee meeting on economic development and capital market have not changed. At the current stage, the whole country should work together for economic development, which should be the focus of the market. In the short term, we can still continue to pay attention to the focus of economic “steady growth”, including finance, real estate, building materials, etc. In the long run, when the systemic risks dissipate gradually, the core assets in high prosperity new energy and consumer medicine still deserve special attention.
Cinda Australia Asia Fund believes that still needs to believe in the determination and ability of the country to stabilize growth, and there is still a window for reducing reserve requirements and interest rates in April. Focus on the following main lines: first, subversive innovation, mainly focusing on the direction of less capital investment and insensitive to monetary policy, such as intelligent automobile industry, industrial Internet and automatic office; Second, industries that can face the energy crisis and overcome the supply bottleneck, such as nuclear power, coal chemical industry, new energy materials, green power, etc; Third, industries that benefit from steady growth and have the logic of dilemma reversal, such as breeding, transportation, tourism, finance, construction, etc.
SDIC UBS believes that the market may still repeat in the short term, but the medium-term outlook should not be overly pessimistic under the condition of “steady growth”. In the follow-up, we still need to continue to pay attention to the progress of global relations, inflation trend, epidemic prevention and control and other aspects to judge market changes.
The valuation of the growth sector has declined for nearly four consecutive months. After substantial adjustment, it has become more attractive Jinxin fund Huang Biao believes that from the perspective of time and space, it may have fully or even excessively reflected the impact of the epidemic: from the perspective of index point, the gem index has fallen back to the mid-2020 level, and from the perspective of valuation level, the current valuation of growth stocks has fallen to the lowest level close to the epidemic in the first quarter of 2020, which shows that the market sentiment has been extremely pessimistic.
Huaxia Fund said that in the short-term complex and changeable process of market environment, it also needs more patience, especially confidence in growth stocks. As of April 9, a total of 221 companies in a have released the performance forecast of the first quarter (the disclosure accounts for about 5%). The high boom field is mainly concentrated in the two directions of upstream cycle and high-end manufacturing. Among them, growth stocks will still be the main source of income for the whole year, while the high price can still be sustained. Cycle stocks are the direction of both reverse investment and boom investment, and growth + cycle is still the main investment line in the subsequent market rebound.
Nord fund manager Xie Yi pointed out that choosing stocks with reasonable valuation and good growth can also better cope with the relatively tight environment. Therefore, looking at the medium and long term, we believe that the current A-share assets are of great investment value, and we continue to be optimistic about the follow-up market
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