introduction to SSE
"Black Monday" came unexpectedly
On April 25, the three major A-share indexes accelerated downward, closing down more than 5%. Among them, the Shanghai stock index fell below the integer mark of 3000 points, which is the first time that the Shanghai stock index fell below 3000 points since July 2020
As of the close, the Shanghai Composite Index closed at 292851 points, down 5.13%; The Shenzhen composite index closed at 1037928 points, down 6.08%; Gem index reported 216900 points, down 5.56%. The net outflow of funds from the North throughout the day was 4.397 billion yuan.
two cities, only 147 stocks rose, 4540 stocks fell, and thousands of stocks fell by the limit or more than 10%
The foreign exchange market also suffered a setback april 25, the RMB exchange rate continued to decline as of press time, the offshore RMB lost 6.58 against the US dollar, the lowest since April 2021. Meanwhile, onshore RMB fell below the 6.54 mark against the US dollar
"No peace, no backwater, no return" is not only the wisdom of the ancients, but also one of the laws of market operation. Institutions generally believe that in the face of market fluctuations, they should be based on long-term and calm response.
quotation analysis
nonferrous metals sector led the decline, while non bank finance was strong
On Monday, both Shanghai and Shenzhen markets opened sharply lower, and the three major indexes accelerated their decline in the afternoon. At the same time, the turnover of Shanghai and Shenzhen stock markets was significantly higher than that of the previous trading day.
Hong Kong stocks also showed unilateral weakness today. The Hang Seng Index closed down 3.73% and fell below the 20000 point mark. The Hang Seng technology index fell 4.87% and the Hang Seng state-owned enterprises index fell 4.13%.
On the disk, individual stocks fell more and rose less. There were less than 200 popular stocks in the two cities, and thousands of stocks fell by the limit or more than 10%.
All industry sectors fell, led by non-ferrous metals, with an overall decline of more than 8%, Zijin Mining Group Company Limited(601899) closing down more than 6%, and Ganfeng Lithium Co.Ltd(002460) down more than 9%.
China's commodity futures market also closed mostly down, with black series and energy chemicals falling across the board, glass and methanol main contracts falling by the limit, and iron ore falling by more than 10%.
In addition, the sectors of national defense, military industry and basic chemical industry also fell deeply. In the power equipment sector, the announcement of Contemporary Amperex Technology Co.Limited(300750) delayed the disclosure of the first quarterly report, closing down more than 6%, while Sungrow Power Supply Co.Ltd(300274) fell more than 9%. Several heavyweights fell sharply, China Merchants Bank Co.Ltd(600036) , New China Life Insurance Company Ltd(601336) , Wuliangye Yibin Co.Ltd(000858) , Longi Green Energy Technology Co.Ltd(601012) , etc. all closed down by more than 6%.
non bank financial sector fell relatively little, Huaan Securities Co.Ltd(600909) , Minsheng Holdings Co.Ltd(000416) bucked the trend and rose the limit
5 trading days down more than 2000 basis points
RMB exchange rate continues to decline
The current round of RMB devaluation began in early March, and the main decline came from nearly five trading days. Since April 19, the offshore RMB exchange rate has fallen by more than 2000 basis points in five trading days.
The recent continuous decline of RMB exchange rate has aroused widespread concern of market investors. Its impact on the stock market and the trend of RMB exchange rate in the future have become the focus of institutional research.
for the current round of RMB exchange rate decline, the market is mostly due to the continuous release of interest rate increase signal by the Federal Reserve, and the scale reduction is stronger than the market expectation. In addition, there are also views that it is the result of the rebound of China's epidemic, the volatility of financial markets, the convergence of interest rate differentials between China and the United States and other factors
According to Guan Tao, the Boc International (China) Co.Ltd(601696) global chief economist, the tightening of the Fed's policy is an important factor affecting the trend of the RMB exchange rate this year. The adjustment, whether in mid and late March or recently, is driven by the offshore market. "The recent sharp decline is a concentrated vent of the pressure of market shorting, which belongs to market correction rather than policy guidance."
Citic Securities Company Limited(600030) co chief economist Mingming said that the increasing pressure of RMB exchange rate depreciation in this round is mainly due to the downward pressure on economic fundamentals caused by covid-19 pneumonia and the strengthening of the US dollar. "The supply chain disturbance superimposed on the upward trend of the US dollar index may put pressure on the RMB in the short term."
Since this year, under the background of the upward trend of the US dollar index, the exchange rates of non US currencies have decreased to varying degrees. Among them, the yen fell sharply, and its exchange rate against the US dollar hit the lowest value in 20 years, and once approached the 130 mark last week; Since the beginning of the year, the depreciation of the yen against the US dollar has exceeded 10%. Institutional people believe that relatively speaking, the trend of RMB exchange rate is relatively strong.
"In a single week, the devaluation of the RMB is large, but this year, the RMB is still strong compared with other currencies in the world." Wu Zhaoyin, director of macro strategy of AVIC trust, said that China's trade surplus is high, and the internal strong foundation of the RMB still exists. The convergence of short-term interest rate difference between China and the United States has a certain pressure on the RMB, but there are certain limits, and the duration will not be too long.
The future trend of RMB exchange rate is also the focus of the institution.
China International Capital Corporation Limited(601995) believes that in the long run, China's economic fundamentals support the valuation center of RMB exchange rate to remain basically stable at a reasonable and balanced level for a long time. This means that the RMB has neither a basis for long-term depreciation nor a basis for long-term appreciation. Under the background of the increase of short-term elasticity and the intensification of two-way fluctuations, there will still be the logic of mean return in the medium and long term of RMB exchange rate.
hot wire uncoupling
Why did it fall more than expected on Monday? After hours, a number of institutions made an emergency interpretation.
why did it fall sharply
Huaxia Fund believes that the current A-share operating environment is more complex, and short-term uncertainties continue to disturb. Internally, the risk of multi-point spread of the epidemic has aroused concern, and the downward pressure on economic fundamentals is more obvious in stages; From the periphery, the expected process of us tightening is accelerated, US bond yields continue to rise, and the short-term decline of RMB exchange rate also puts pressure on the market. In the fluctuation process dominated by emotion, the index will inevitably overshoot, and the process of market decline itself is also the process of risk release.
China Merchants Fund said that A-Shares began to reflect the risk of global economic recession and entered the risk aversion mode for three reasons:
First, the multi-point spread of the epidemic is having a new impact on the economy.
Second, under the background of "no speculation in housing and housing" and "local government implicit debt control", the transmission of wide currency, wide credit and profit bottom is not smooth, and the recovery of economic bottom and A-share profit bottom takes longer.
Third, the liquidity collapse has led to a sharp rise in the correlation of various assets. The core reason behind this is that the hidden worries of the global economic recession have begun to appear.
Boshi Fund said that last week, the average daily turnover of A-Shares was less than 800 billion yuan, which has fallen to the low level since June 2021. From the gradually shrinking turnover, it can be seen that the current market sentiment is close to the freezing point, and the fund wait-and-see attitude is more obvious. From the perspective of the north direction of funds, the volatility is relatively large, indicating that the attitude of overseas funds towards A-Shares is not very clear. In the short term, investors' sentiment will still be suppressed by such factors as the Fed's interest rate hike and the Chinese epidemic. In the absence of effective incremental funds, the upward momentum of A-Shares is insufficient and will continue to shock to the bottom.
In view of the recent market downturn and today's sharp decline, China Securities Co.Ltd(601066) Securities chief strategist Chen Guo believes that this is the result of the comprehensive impact of many disturbing factors still facing the short-term market:
First, in the context of the multi-point distribution of the epidemic throughout the country, the market hopes to observe a significant improvement in economic data.
Second, the last two weeks of April are the intensive period for the release of annual reports and first quarter results. Investors' expected probability of this year's performance will continue to be revised down, putting pressure on the follow-up market.
Third, the hawks of the Federal Reserve said that they exceeded expectations, and the process of overseas monetary tightening policy may be accelerated.
Fourth, after the continuous decline of the market, the incremental capital is insufficient, and the micro liquidity is difficult to recover in the short term. At present, the median net value of the fund is close to the historical extreme area, the issuance of new funds is depressed, the proportion of private equity funds touching the early warning line and liquidation line continues to rise, and the leveraged funds are relatively fragile.
Fifthly, the current expectation of RMB devaluation is strong, which suppresses the market risk appetite to a certain extent.
Pang Ming, chief strategist of Huaxing capital group, said that the rotation of growth stocks, consumer stocks and value sectors since this year mainly depends on the switching of adverse factors such as Fed policy and US bond interest rate, epidemic situation and downward pressure on real estate. Only when these three negative factors are eliminated, can there be a more stable general rising market in the equity market. In other words, the market probability will continue to fluctuate in a short time.
Pang Ming said that considering the drastic changes in the market structure and external environment in recent years, I'm afraid the average return may not become an inevitable trend. If the market is expected to rebound continuously, the return of confidence is the necessary condition.
stock market and exchange rate are not directly causal
Haitong Securities Company Limited(600837) strategy team believes that logically, the stock market and exchange rate are not directly causal, but there is a certain correlation: first, from the perspective of fundamentals, both the stock market and exchange rate reflect the fundamentals. Generally, good economic conditions correspond to the appreciation of exchange rate and the rise of stock market. Second, from the perspective of capital, with the continuous opening of the A-share market, the impact of foreign capital flow on A-shares is increasing. When the RMB appreciates, foreign capital often flows into A-shares.
Haitong Securities Company Limited(600837) through statistics, it is found that in the stage of RMB devaluation in history, A-Shares rose and fell, and they rose for a long time. From the perspective of long-term cycle, there have been two large depreciation cycles of RMB since 2010. However, due to the long time span, A-Shares have experienced the process of rise and fall during this period, and the cumulative performance of the range is rise. From the perspective of short cycle, there have been eight obvious devaluation cycles of RMB since 2010. In these eight short cycles, A-Shares rose and fell four times, and there were seven net inflows of funds going north during the period.
In addition, some institutions found that the sudden accelerated depreciation of the RMB exchange rate coincided with the sharp decline of US stocks. For example, the accelerated depreciation of the RMB exchange rate on April 22, and the three major US stock indexes also fell sharply on the same day.
In this regard, Zhang Jingjing, chief analyst of Western Securities Co.Ltd(002673) macro, said that behind the seemingly unrelated two types of assets, the same macro logic is reflected: the outbreak in China and the accelerated tightening of the Federal Reserve. If the RMB exchange rate depreciates further in the next one to two months, and the US stocks accelerate the downward exploration and induce liquidity impact after the formal contraction of FOMC fed in May, it means that the Fed is expected to end the interest rate hike ahead of schedule and loosen the margin of monetary policy. Once so, the bottom of the A-share market will also approach.
medium and long term optimism is brewing
There is no peace, there is no end. Although today's market has once again impacted the confidence of many investors, in the view of professional investors, in a cyclical market, the acceleration of one trend often means the opening of another direction.
Institutions generally believe that the shock bottoming of the short-term market may continue, but in the medium and long term, some positive factors are also gathering.
"smart money" QFII appears 125 A shares
According to the data of China stock market news choice, as of April 25, among the stocks that have disclosed the first quarter report of 2022, QFII appeared in the top 10 tradable stocks of 125 stocks.
of which, QFII holds more than 100 million shares in Bank Of Nanjing Co.Ltd(601009) , Vantone Neo Development Group Co.Ltd(600246) , Jiangsu Financial Leasing Co.Ltd(600901) and Zijin Mining Group Company Limited(601899)
In terms of the proportion of the number of shares held to the outstanding shares, QFII holds more than 10% of the shares, namely Tellgen Corporation(300642) .
In addition, there are 50 new stocks of QFII in the first quarter, of which Shenzhen Jinjia Group Co.Ltd(002191) , Langold Real Estate Co.Ltd(002305) , China Coal Xinji Energy Co.Ltd(601918) QFII holds more than 10 million shares.
On the list of circulating shareholders of A-share listed companies, there are many global asset management giants. Taking the Central Bank of Norway as an example, the Norwegian Central Bank of Norway as an example. At present, there are five A shares held by the Norwegian central bank. At present, the institution holds a total of five A shares, namely Hongda Xingye Co.Ltd(002002) 311 added 2625300 shares.
According to the disclosed data, UBS group holds a total of 31 A-share listed companies, which is the QFII with the largest number of A-shares at present. Among them, UBS group holds more than 10 million shares in China Coal Xinji Energy Co.Ltd(601918) and Vcanbio Cell & Gene Engineering Corp.Ltd(600645) . Compared with the end of last year, UBS group increased its positions in China Coal Xinji Energy Co.Ltd(601918) by 12.63 million shares. In addition, Fujian Tianma Science And Technology Group Co.Ltd(603668) , Sinocare Inc(300298) and Changhong Meiling Co.Ltd(000521) were increased by UBS group by more than 5 million shares.
big consumption and big finance performed relatively well in history
What is the real impact of RMB devaluation on different industries and asset performance? From the perspective of equity, what is the impact on each sector of a shares?
Guotai Junan Securities Co.Ltd(601211) analyst Dong Qi believes that from a fundamental point of view, the industries benefiting from the depreciation of the exchange rate are mainly concentrated in the industries with high overseas income and strong linkage with international prices.
equity performance: in the past depreciation cycle, large consumption and large finance performed relatively well in history
Specifically, there are three types of industries that benefit from RMB depreciation:
First, the depreciation of local currency and the appreciation of foreign currency have brought about the improvement of terms of trade, which has relatively benefited export-oriented industries, mainly mechanical appliances, electrical equipment and its parts, textile raw materials, etc;
Second, industries with a large proportion of overseas income are relatively favorable, such as electronics, household appliances, computers, textiles and clothing and basic chemical industry;
Third, the rise of imported inflation under the depreciation of exchange rate has the ability to transmit costs to the downstream, link with international prices and benefit industries with high inventory in China.
"It is found that the overall depreciation cycle of equity can be more volatile than the four-year depreciation cycle since 2015." Dong Qi believes that there are differences between the perspective of industry performance and the fundamental logic of exchange rate depreciation. Among them, the overall performance of large consumption and large finance is relatively good, which is desensitized to the logic of exchange rate depreciation, and is more related to policy factors such as transaction, style and counter cyclical regulation.
don't be too pessimistic in the future
Institutions generally believe that the shock bottoming of the short-term market may continue, but in the medium and long term, some positive factors are also gathering.
China Securities Co.Ltd(601066) securities strategy team also stressed that in the short term, the market bottom grinding process may continue to repeat, but investors do not need to be too pessimistic and should patiently wait for the market to complete the construction of U-shaped bottom. On the one hand, the policy bottom and credit bottom of the A-share market may have been roughly confirmed, and the subsequent profit bottom will be gradually completed in the medium term; On the other hand, the market valuation and sentiment indicators have also entered the bottom area of the market. Although there is still the possibility of continued decline in the follow-up, the space in terms of odds is relatively limited. It is suggested that investors consider defensive counterattack, bargain hunting layout, post epidemic recovery and "steady growth" overweight related sectors.
Huaxia Fund expects that the steady growth policy will be further overweight to stabilize market confidence. Suppressed by multiple factors, although the index is difficult to reverse in the short term, it is not suitable to be overly pessimistic at the current time point. The bottom of the market policy has been very clear, but it takes time to confirm the transition to the bottom of the market.
Wang Jing, chief strategic analyst of ChuangJin Hexin fund, saw some positive factors. "The introduction of personal pension development opinions last week and the encouragement of institutional long-term funds to enter the market show that senior managers are paying attention to the systemic risks faced by the market. If the further decline of the market leads to the risk of large-scale stock pledge, more positive policies may be introduced."
Hu Yaowen of Haifutong Fund said that the main contradiction in the A-share market is the impact of the epidemic development on the economy and there is some uncertainty in the short term of steady growth. In the follow-up, we will closely follow up on two points: one is the change of the improvement of the epidemic situation, that is, the reasonable expectation of the resumption of production and the resumption of work time; Second, further implement the substantive implementation of the steady growth policy. Looking back on the past, each crisis event will be accompanied by the acceleration and overweight of relevant policies. In the future, the prevention and control policies will keep pace with the times. China's economy is still attractive and resilient. The determination to stabilize growth policy will not waver, and there may be the possibility of overweight in the future.
If the fund withdrawal is used to deduce the bottom of the market, Haitong Securities Company Limited(600837) Xun Yugen's team research report believes that the decline of fund net worth and CSI 300 since this year has been similar to that in 2008, 2011 and 2018. Recently, with the further continuation of the market correction, some investors are also pessimistic about the outlook.
Measured by the index of common equity funds, the net value of active equity funds has fallen by 23% this year (as of April 22, 2022, the same below), while in history, the only years when the fund fell by more than 20% were 2008 (- 51%), 2011 (- 25%) and 2018 (- 24%); In addition, from the performance of the broad-based index, the CSI 300 has also decreased by 19% in the whole year of this year, while the years in which the CSI 300 fell by more than 20% in history are also only 2008 (- 66%), 2011 (- 25%) and 2018 (- 25%).
According to the analysis of Xun Yugen's team, when the CSI 300 fell by 20%, the average return of fixed investment for two years was 13%, and the average return of fixed investment for two years after the stock fund index fell by 20% was 47%. Learning from historical data and focusing on the future, we should cherish the current layout period.
"Because of the epidemic control, it is expected that China's economy will be under pressure in the short term, but we are still full of confidence in the long-term resilience and vitality of China's economy. In fact, with the downward revision of the market valuation level, many industries have shown better 'cost performance', which provides an excellent and broad stock pool for long-term investors." Li Jing, director of stock research at Fidelity International, said.
Meng Ning, director of China equity investment of lubemaker, believes that in the medium term, there are obvious signs of marginal relaxation in the real estate market, and the valuation of growth stocks has begun to be attractive after the sharp adjustment at the beginning of the year. Therefore, the value sector represented by the real estate industry chain and the growth sector represented by new energy have investment value at the current stage.
\u3000\u3000 "We believe that the current valuation of China's stock market is reasonable, and China's policies are expected to continue to provide support. At the same time, the correlation between China's stock market and other risky assets in the world is also low. Since covid-19 epidemic, although China's stock market has lagged behind most regions including the United States, Europe and India, we believe that the valuation of China's stock market is reasonable relative to its own historical level, but not relative to the United States And other major markets are close to historical highs. " Zhang Bo, manager of Wellington investment management fund, said.
Zhang Bo further said that Chinese stocks, including the mainland A-share market, Hong Kong stock market and Chinese enterprises listed in the United States, will continue to provide investors with broad potential investment opportunities. These investment opportunities are not only considerable in number but also diverse in types. At the same time, China's individual investors still have a high participation in the stock market, which also provides sufficient liquidity for China's stock market. "We believe that in this environment, experienced active institutional investors will usher in huge investment opportunities."
