A shares fell below 3000 points again, witnessing history. On April 25, the Shanghai Composite Index closed at 292851 yuan, and the three indexes fell by more than 5%. The volume of transactions in Shanghai and Shenzhen stock markets today was 896.9 billion yuan, and the net outflow of funds going north exceeded 4.397 billion yuan. Heavyweights of many funds, such as China Merchants Bank Co.Ltd(600036) , Contemporary Amperex Technology Co.Limited(300750) and so on, fell by more than 5%.
At the same time, the rapid depreciation of the RMB exchange rate disturbed the market. The offshore RMB exchange rate against the US dollar depreciated by more than 3% in just five trading days Shenwan Hongyuan Group Co.Ltd(000166) believes that the current epidemic has a significant impact on exports and industrial production, which is the main reason for this round of depreciation; The short-term adjustment of the market basically reflects the downward revision of the fundamentals of a shares. In addition, on April 25, the central bank lowered the reserve requirement by 0.25 percentage points, but it was lower than the market expectation by 0.5 percentage points.
CITIC, CICC, Haitong, Shenwan Hongyuan Group Co.Ltd(000166) , China Securities Co.Ltd(601066) , China Merchants, West China, Guohai and other securities companies have successively released research reports on “whether the market has bottomed out”. Most seller analysts believe that the market has entered the stage of repeated “grinding the bottom”.
The next month will be an important inspection period, mainly observing the closure and resumption of the epidemic, the setting tone of the Political Bureau meeting on subsequent economic policies at the end of April, the impact of “steady growth” on real estate consumption, global inflation and other policy signals and fundamental improvement signals China Securities Co.Ltd(601066) chen Guo suggested that investors should be patient and should not rush forward. They should wait for opportunities for Fundamentals to bottom out, external environment to improve or policy to be strongly relaxed. If the market is significantly adjusted, it can also be gradually distributed.
a shares fell below 3000 points again, the same scene 14 years ago
The market opened low all day, and the three major indexes fell by more than 5%. The Shanghai Composite Index closed below 3000 points, a new low since mid June 2020. The Shanghai Composite Index fell 5.13% to close at 292851 yuan; The Shenzhen composite index fell 6.08% to close at 1037928 yuan; The gem index fell 5.56% to close at 2169 yuan. As of today’s close, 682 stocks fell by the limit and 4623 stocks turned green.
The Shanghai index fell below 3000 points, playing the same trick as it did 14 years ago. It took only 127 trading days to fall below 3000 from 6124.
The turnover of Shanghai and Shenzhen stock markets today was 896.9 billion, 143.6 billion more than that of the previous trading day. The net outflow of funds from Beishang exceeded 4.397 billion yuan, of which 4.847 billion yuan was sold by Shanghai Stock connect and 450 million yuan was bought by Shenzhen Stock connect; The main net outflow exceeded 52.209 billion yuan.
In terms of sectors, Internet e-commerce, digital currency, cloud games, rare earth, photoresist and other sectors led the decline. Heavyweights of several funds fell sharply, China Merchants Bank Co.Ltd(600036) , New China Life Insurance Company Ltd(601336) , Wuliangye Yibin Co.Ltd(000858) , Contemporary Amperex Technology Co.Limited(300750) , Longi Green Energy Technology Co.Ltd(601012) , etc. all fell by more than 5%.
Shenwan Hongyuan Group Co.Ltd(000166) believes that this short-term adjustment basically reflects the downward revision of the fundamentals of a shares. In addition, behind the devaluation of the RMB exchange rate, the interest rate difference between China and the United States may not be the core issue; The impact of the epidemic in China is the main contradiction. Maintain the judgment of “grinding bottom in the second quarter and opportunity in the third quarter”.
For today’s market adjustment, open source Securities believes that the overall weakening trend of market fundamentals has not changed, and the core of the rebound is liquidity driven. The key new variable that is not optimistic about the situation in April is the epidemic situation. The epidemic not only further weakened the expectation of economic fundamentals; It will also boost China’s CPI expectations and narrow the real interest rate gap between China and the United States, which may eventually lead to capital outflow, RMB devaluation and the loss of “autonomy” of China’s monetary policy; It also increases the demand for funds in the service industry, leading to the flow of current funds to entities, thus squeezing the liquidity of the financial market. Looking forward to may, the rise of overseas US bond yields and the repeated situation in Russia and Ukraine will still make the market mood fluctuate, but the “epidemic relief” is the key.
What are the influencing factors? Previously, Tesla Shanghai Super factory and Saic Motor Corporation Limited(600104) have officially started to resume production on April 19, and the great wall tank 300 resumed production on April 22, together with its core suppliers. In this regard, insiders told the financial associated press that the closure and control of the epidemic in Shanghai affected the production capacity of the automobile industry chain, and there was pressure to restore the output before the closure and control after returning to work.
Meanwhile, the central bank cut the reserve requirement by 0.25 percentage points on the 25th, but it was lower than market expectations.
On April 25, the people’s Bank of China lowered the deposit reserve ratio of financial institutions by 0.25 percentage points and released long-term funds of about 530 billion yuan. The previous market expectation was 0.5 percentage points lower. It is noteworthy that the central bank’s RRR reduction was announced on April 15. On the 15th and 18th, the Shanghai Composite Index fell slightly by no more than 1%.
China Securities Co.Ltd(601066) Chen Guo believes that the impact of the epidemic on the production side mainly comes from the stagnation of logistics, the shortage of raw materials, the difficulty of resuming production under seal control, the passive accumulation of inventory caused by the blocked sales of some enterprises, etc. the industries with damaged prosperity mainly include logistics, ports (by regions), automobile, electronics (weak impact), etc.
Zheshang Securities Co.Ltd(601878) believes that “the worst time is probably over. From the week of April 18, the automobile supply chain has gradually resumed single shift from shutdown. At present, the resumption of work and production of automobile enterprises is progressing steadily, and it is expected to gradually return to double shift in mid May. In terms of demand, the data of May and June are relatively important, and the impact of price rise, epidemic situation and macro economy on automobile consumption will appear, but we are not pessimistic about demand.”
The one-day decline of the stock market is influenced by many factors. From the aspects of macroeconomic situation, industry resumption of work and production, investor sentiment and so on, it is currently in a chaotic state.
market pessimism released
China Industrial Securities Co.Ltd(601377) Zhang Qiyao expressed his view on Sunday that from a number of indicators, the current market pessimistic expectation has been largely reflected in the stock price, and the subsequent market will shift from overall adjustment to structural differentiation.
At the valuation level, the PE valuation of all a is close to the level when the global market plummeted due to the epidemic in March 2020, and the valuation of gem is lower than that at that time.
The financial Associated Press reporter combed the industry valuation and found that most industries were lower than the historical average. As of April 22, 2022, among the 31 shenwanyi level industries, only the valuation quantile of social services, beauty care, automobile, agriculture, forestry, animal husbandry and fishery, food and beverage is more than 50%, and the valuation of these five industries exceeds the historical average, of which social services is as high as 79.7%. The valuations of defense and military industry, computer, non-ferrous metals, medicine and biology and non bank financial industries were significantly lower than the historical average, and the industry valuation quantiles were 26.9%, 19%, 11.8%, 8.1% and 1.4% respectively. However, it is worth noting that the signals at the valuation, capital and behavioral levels only play an auxiliary role in judgment.
In terms of market activity, the turnover of Shanghai and Shenzhen stock markets has also dropped to less than 800 billion yuan, and the balance of two financial institutions has also dropped to 1.6 trillion yuan from nearly 2 trillion yuan in the third quarter of 2021.
In terms of equity risk premium, the equity risk premium of wandequan a, Shanghai Composite Index and gem index has risen to 72.1%, 82.2% and 94% respectively since 2010, all exceeding the level after the end of the stock disaster in early 2016.
In terms of fund issuance, 164 new funds were established every month on average last year. As of April 22 this year, only 79 new funds were established every month on average, which has been “halved” compared with last year. In April, only 12 new funds were even established. The share issued by the fund decreased from 566.2 billion in January 2021 to 53 billion in March this year, a year-on-year decrease of 90%.
At the same time, the rapid depreciation of the RMB exchange rate for five consecutive days once again disturbed the market. From the closing price of 6.3788 on April 18 to the intraday close of 6.60 on April 25, the offshore RMB depreciated by more than 3% against the US dollar in just five trading days.
Shenwan Hongyuan Group Co.Ltd(000166) n e believes that the current epidemic has a significant impact on exports and industrial production, which is the main reason for this round of depreciation. In view of the strong support of the strong trend of China’s exports for the RMB exchange rate in the previous two years, the current market is based on the fact that the LPR has not been lowered and the annual economic growth target is expected to be revised down, and it is expected that the overweight of the steady growth policy may not be very strong. Therefore, the downward revision of the prospects of industrial production and exports may be the key reason for the short-term sharp depreciation of the RMB exchange rate in this round.
market enters the grinding stage
Before the sharp decline of A-Shares today, there were predictions about the “bottom” in the market Zhang Xia, chief of China Merchants Securities Co.Ltd(600999) strategy, was more radical. He shouted “now is the end” in his circle of friends on April 22. Zhang Xia said that now is the bottom of the market and said frankly that “even if you hit your face, you will stand up straight”. At the same time, he stressed that the way of stocks is that people abandon me. “What you like and love has gone up too much, and the missed targets have fallen to more than ten or twenty times, and the coveted price is in front of you.”
As early as March 25, China International Capital Corporation Limited(601995) issued “how to judge whether the A-share market has bottomed out?” Article. Combing the six important periodic bottom characteristics and signals of A-Shares since 2008, this paper summarizes the five dimensional signals to judge whether the market has bottomed out, namely fundamentals, policies, valuation, funds and behavior.
CICC believes that the follow-up market may gradually enter the bottom grinding stage, and the trading volume may shrink empirically. The market valuation has also reached a relatively low level in history, and there have been many accumulated internal and external negative factors. The medium-term opportunity may be more inclined to opportunity than risk.
Haitong Securities Company Limited(600837) summing up the characteristics of the stabilization and bottoming of the A-share market, it is found that High Dividend Stocks take the lead in stabilizing sideways, and then the index bottoms, while the heavy position stocks of the fund will reach the bottom and stabilize after covering the decline. At present, the characteristics of the market are that high dividend stocks have bottomed out and rose, while heavy warehouse stocks are still making up for the decline.
Citic Securities Company Limited(600030) proposed that the multiple pressures faced by equity assets were gradually relieved and the market was about to stabilize. After stabilization, it is expected that the gradual improvement of fundamentals will drive the equity market. The current “bottom grinding” stage is a good time for layout.
China Securities Co.Ltd(601066) chief strategist Chen Guo said on April 10 that the market is in the bottom grinding period from the medium-term perspective, but it faces some challenges: China’s economy has entered the active destocking stage, and the epidemic has disturbed the economy; The rapid rise of US bond interest rate has not been stable, and there is uncertainty in the conflict between Russia and Ukraine and the geopolitical situation.
Huaxi Securities Co.Ltd(002926) said that the aggressive interest rate hike expectation of the Federal Reserve and the Chinese epidemic restrict market risk appetite. The sustained development of the epidemic has led to short-term pressure on China’s economy, poor logistics and supply chain disturbance, resulting in shutdown of some enterprises and impact on Residents’ consumption. Before the epidemic becomes clear, it is expected that A-Shares will continue to grind the bottom repeatedly.
Sealand Securities Co.Ltd(000750) strategy Hu guopeng team also believes that the current A-share is in the bottom grinding period, and the upside down of China US interest rate spread does not mean that the market will face a sharp correction again.
significant adjustment and gradual layout
After today, the three major A-share indexes fell by more than 5%, and the valuations fell one after another Haitong Securities Company Limited(600837) Xun Yugen said that this year’s style is similar to that of 2012. The annual value is slightly dominant, and the growth is expected to be dominant in stages. At present, it continues to focus on the main line of steady growth, such as finance, real estate and new infrastructure, which is more flexible.
China Securities Co.Ltd(601066) Chen Guo said that the next month (from mid April to mid May) is the key observation period, and the market may usher in the conditions to confirm the completion of the bottom. A series of issues such as the epidemic situation in Shanghai, the closure and resumption of work, the setting of follow-up economic policies at the Political Bureau meeting at the end of April, global inflation and the expectation of raising interest rates are also important observation points in the future.
CICC said that effective policy signals and fundamental signals of improved earnings expectations are important conditions for the formation of phased bottoms. In the future, the market will focus on the potential turnaround of the following factors that suppress market fundamentals: 1) the situation in Russia and Ukraine and the easing of global inflationary pressure. 2) “Steady growth” has gradually taken effect, especially in the real estate and consumption fields with more concerns. 3) The epidemic situation in China has been gradually brought under control and restrictions on economic activities have been eased. 4) The marginal stability of China US relations and the relative clarity of China concept shares.
Chen Guo suggested that investors should be patient and should not rush forward. They should wait for the opportunity of fundamentals bottoming, the improvement of the external environment or strong easing of policies. If there is a significant adjustment in the market, they can also gradually layout. The layout direction focuses on early cycle varieties (real estate chain, etc.). If the subsequent US bond interest rate stabilizes and China’s broad currency strengthens, they can consider gradually increasing the allocation of growth.
Shenwan Hongyuan Group Co.Ltd(000166) believes that the two quarter of this year is still a weak market, but there may be short-term and short-term trading opportunities after the short term adjustment. First, the mitigation of the epidemic is focused on finding the direction of no other logical flaws besides the epidemic: Baijiu, medical beauty, and undervalued cyclical value (coal and real estate); Second, the Fed’s tightening expectations fulfilled the transaction: the performance of short-term scientific and technological growth was suppressed, and it is expected to usher in an oversold rebound worthy of participation after the May Day holiday.
