On the 14th, the activity of A-share market increased significantly. A number of fund managers said that the market has given a good response to the expected reduction of the reserve requirement. Next, we should observe the specific implementation of the policy combination, including the reduction of the reserve requirement. It is clear that the policy bottom has been further consolidated, and the market bottom may be getting closer and closer.
RRR reduction expectation boosts market confidence
On April 13, the national Standing Committee proposed “timely use of reserve requirement reduction and other monetary policy tools”. “This is in line with market expectations.” The person in charge of equity investment of a large public fund told reporters that according to historical experience, the central bank usually implements the RRR reduction policy 2 to 30 days after the proposal of the national standing committee, and the expectation of RRR reduction has boosted market confidence.
The head of the research department of another fund company said there was no doubt about the necessity of reducing the standard. “At present, economic development is facing triple pressures, and the new challenge lies in the soaring global commodity prices. The pace of interest rate hike by the Federal Reserve is likely to accelerate. March and April are the peak season for construction and the peak of credit supply. Liquidity consumption is expected to increase, which is the key window period for RRR reduction.”
“In order to achieve the goal of annual economic growth of about 5.5%, the intensity of monetary policy needs to be further strengthened.” The official said that the RRR reduction is helpful to stabilize expectations, but it needs other direct rescue and countercyclical policy support.
Huaxia Fund believes that at present, the market expects the Federal Reserve to raise interest rates about 9 times a year, and the probability of raising interest rates by 50bp in May is more than 70%. The narrowing of China US interest rate spread will not restrict the direction of China’s monetary policy, but may have an impact on the extent of easing.
2q configuration is prudent and progressive
In addition to proposing the timely use of monetary policy tools such as RRR reduction to promote banks to enhance their credit extension capacity and reduce the financing cost of the real economy, stabilizing consumption is another focus of the deployment of the national Standing Committee. Many fund managers believe that with the gradual improvement of the epidemic, consumption may become a new breakthrough point in the capital market, and the allocation strategy is cautious and enterprising.
Wu Yue, director of large consumption research of Harvest Fund, believes that the current market is still in a period of wandering at the bottom, and there has been no comprehensive reversal for the time being. It is believed that the second quarter may be a transitional quarter, and the market may be clearer in the second half of this year.
Wu Yue said that this year may be the time when investors need to closely observe the consumption track. Structural opportunities may appear from the second quarter, and the overall consumption sector may have a more optimistic or even comprehensive market in the second half of the year. “Whether from the medium-term dimension or from the long-term dimension of two or three years, I think consumption has reached a window period worthy of attention and even began to increase the layout.”
In the consumption field, Yinhua Fund is very optimistic about baijiu. Yinhua Baijiu Baiyun believes that the main reason is that the industry companies are good and the market sentiment is improved. The early stage of the Baijiu sector also has accumulated some kinetic energy. It is optimistic about the high-end liquor with pricing power and performance certainty and the second high-end Baijiu liquor that is still in the stage of national expansion. Meanwhile, it is expected that the leading liquor enterprises will be expected to increase in volume and price. After the performance is fulfilled, the valuation of high-end Baijiu is expected to be further repaired.
In terms of medium and short-term allocation, Huaxia Fund said that the cycle and growth are still worthy of attention.
