Yesterday, the Shanghai stock index fell below 3000 points and today it fell below 2900 points, breaking the new low since June 2020.
On April 26, the central bank took action to stabilize the foreign exchange rate, the devaluation trend of RMB slowed down, and the sentiment of A-share market eased. The Shanghai stock index once rose and rose in the morning, but in the afternoon, as the RMB exchange rate weakened again, the Shanghai Stock Index fluctuated and fell, closing down 1.44%. Nearly 4000 shares in the two cities fell, with 374 stocks falling by more than 9%, and the profit-making effect is still poor.
It is worth mentioning that at the time of the market decline, regulators’ attention to the stock market has increased significantly. Before the opening of A-Shares today, the central bank rarely put forward its views on the current A shares, and favorable policies such as stimulating consumption are also being released. At the same time, the intention of increasing holdings and repurchase of industrial capital has also increased significantly.
Under the disturbance of the epidemic, the risk preference of the A-share market decreased and the pessimism increased significantly. However, with the correction of market valuation, many securities companies are optimistic about the repair of A-share valuation China Securities Co.Ltd(601066) securities managing director and chief strategist Chen Guo clearly pointed out that the market showed signs of stabilization after falling below 2900. According to the comprehensive evaluation, this year’s gold pit is near 2900.
Shanghai stock index fell below 2900 points
Brokerage stocks pulled back sharply, cyclical stocks continued to weaken, and the Shanghai index continued to decline today and fell below 2900 points, a new low since June 2020.
On the disk, although the market sentiment has eased compared with yesterday, the profit-making effect is still poor. Today, 3965 shares in the two cities fell, 305 stocks (including St sector stocks) fell by the limit, and 374 stocks fell by more than 9%.
Consumer stocks such as Baijiu, catering tourism, food and beverage rose against the trend. The Baijiu index rose by 2.6%, catering tourism index rose by nearly 2%, food index rose by more than 1%, and beverage index rose by nearly 1%. Specifically, Foshan Haitian Flavouring And Food Company Ltd(603288) , Luzhou Laojiao Co.Ltd(000568) , Imeik Technology Development Co.Ltd(300896) , China Tourism Group Duty Free Corporation Limited(601888) , Wuliangye Yibin Co.Ltd(000858) , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Yihai Kerry Arawana Holdings Co.Ltd(300999) , Kweichow Moutai Co.Ltd(600519) , etc. also rose against the trend.
Cro sector also ushered in a long lost rebound, Wuxi Apptec Co.Ltd(603259) up more than 4%.
At the same time, new energy, cyclical stocks, military industry, software and other sectors fell significantly, and the brokerage sector fell more than 4%, affecting the market rebound.
In the new energy sector, Eve Energy Co.Ltd(300014) fell by more than 4%, and Contemporary Amperex Technology Co.Limited(300750) fell by more than 3%; In the coal sector, Gansu Jingyuan Coal Industry And Electricity Power Co.Ltd(000552) , Dayou energy, Beijing Haohua Energy Resource Co.Ltd(601101) and other stocks fell by the limit; Among military stocks, Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Chengdu Spaceon Electronics Co.Ltd(002935) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) and others fell by the limit, China Avionics Systems Co.Ltd(600372) , Anhui Greatwall Military Industry Co.Ltd(601606) , Sichuan Haite High-Tech Co.Ltd(002023) and others fell sharply.
Affected by the performance of the first quarter, the shares of securities companies also collectively fell sharply, Guosheng Financial Holding Inc(002670) , Chinalin Securities Co.Ltd(002945) , Huaxi Securities Co.Ltd(002926) , Nanjing Securities Co.Ltd(601990) and other limits, China Securities Co.Ltd(601066) , Polaris Bay Group Co.Ltd(600155) , Northeast Securities Co.Ltd(000686) .
On April 25, Huaxi Securities Co.Ltd(002926) and Guoyuan Securities Company Limited(000728) both released the first quarter report of 2022, which is also the first batch of regular reports of securities companies with losses in the first quarter of this year.
According to the disclosure, in the first quarter of 2022, Huaxi Securities Co.Ltd(002926) realized a net profit attributable to the parent company after deducting non profits of -173 million yuan, a decrease of 154.15% over the same period last year Guoyuan Securities Company Limited(000728) realized a net profit attributable to the parent company after deducting non-profit of – 126 million yuan, a decrease of 138.18% over the same period last year.
policy good news releases
While the market continued to decline, the policy positive news also continued to be released.
On April 25, the central bank announced that in order to improve the ability of financial institutions to use foreign exchange funds, the people’s Bank of China decided to reduce the foreign exchange deposit reserve ratio of financial institutions by 1 percentage point from May 15, 2022, that is, the foreign exchange deposit reserve ratio from the current 9% to 8%.
After the news was released, on April 26, the depreciation trend of RMB exchange rate slowed down, and even showed signs of temporary rise. The onshore RMB recovered 6.53 against the US dollar, rebounding nearly 400 basis points from the intraday low, and the offshore RMB recovered 6.55, rebounding 500 basis points from the intraday low. After a brief rise, the RMB exchange rate weakened again and fell near yesterday’s closing price.
With the easing of the depreciation trend of the RMB exchange rate, the panic and pessimistic expectations of the A-share market have eased.
In addition, before the opening of A-Shares today, the central bank also rarely expressed its views on stock market fluctuations, and regulators have paid more attention to the stock market. The relevant person in charge of the people’s Bank of China pointed out that we are concerned about some fluctuations in the financial market recently, which are mainly affected by investors’ expectations and emotions. At present, China’s economic fundamentals are sound, the potential for endogenous economic growth is huge, and substantial progress has been made in preventing and resolving financial risks.
In addition, the State Council also issued a consumption promotion policy on April 25 to stabilize market expectations Citic Securities Company Limited(600030) research points out that under the current environment, the potential pressure faced by consumption has been more prominent, but the role of consumption on the economy and the importance related to people’s livelihood are self-evident. Therefore, the guidance of supporting consumption recovery from the perspective of national policy has always been clear. However, the recovery and growth of consumption are driven by the consumption capacity of residents and the reduction of the impact of epidemic control. Therefore, the effect of the policy remains to be observed.
Driven by a number of policy positive news, A-Shares rose to 2957 points in early trading today. In the afternoon, due to the weakness of financial sectors such as securities companies, the A-share market weakened again. However, compared with April 25, the market pessimism generally eased.
industrial capital increase and repurchase
With the adjustment of the market, the reduction power of important shareholders in the secondary market has decreased significantly, and even many companies have increased their holdings against the trend, which shows the shareholders’ confidence in the company and reduces the liquidity pressure of stocks.
According to China Merchants Securities Co.Ltd(600999) statistics, at present, the scale of net holdings reduction continues to converge. Up to now, the cumulative scale of net holdings reduction is only 7.5 billion yuan in April, gradually approaching the state of becoming positive. Previously, the monthly net holdings increase of important shareholders appeared in May 2017 and October 2018.
On April 25, Shanghai Bright Power Semiconductor Co.Ltd(688368) , Beijing Tongtech Co.Ltd(300379) , Sichuan New Energy Power Company Limited(000155) , Jiangsu New Energy Development Co.Ltd(603693) and other companies announced plans to increase their holdings of important shareholders. Many companies said that the purpose of the increase is based on the firm confidence in the sustainable and stable development of the company in the future and the recognition of the company’s value, in line with the social responsibility of jointly promoting the stable and healthy development of the capital market.
The company’s shareholding increase plan has been released as of March 26 Beijing United Information Technology Co.Ltd(603613) plans to increase the shares of the company within six months from April 27, 2022. The total increase of the controlling shareholders and actual controllers Liu Quan and Qian Xiaojun is not less than 100 million yuan and not more than 200 million yuan, and the total increase of the directors, supervisors and managers of the company is not less than 10 million yuan and not more than 15 million yuan.
Suzhou Uigreen Micro&Nano Technologies Co.Ltd(688661) also announced that Luo Xingshun, the actual controller, chairman and general manager of the company, plans to increase the shares of the company within 12 months from April 27, 2022, with a total increase of no less than 5 million yuan and no more than 10 million yuan.
In addition, some companies quickly completed the shareholding increase plan China Animal Husbandry Industry Co.Ltd(600195) 426 evening announcement shows that on April 26, 2022, the company received the notice of Huanong assets and the implementation of this shareholding increase plan was completed. During the period from April 18, 2022 to April 25, 2022, Huanong assets accumulated 20306739 shares of the company through centralized bidding through the trading system of Shanghai Stock Exchange, accounting for 1.9995% of the total share capital of the company. On April 20, the company just disclosed the share increase plan of China Huanong Asset Management Co., Ltd., the concerted action of the actual controller.
In addition, since March, listed companies have actively thrown out repurchase plans to stabilize market confidence. According to China Merchants Securities Co.Ltd(600999) statistics, taking the plan date as a reference, the planned repurchase scale corresponding to the repurchase plan issued by Listed Companies in March and April (as of April 24) was 34.5 billion yuan and 12.2 billion yuan respectively, which was at a high level in history. The last repurchase plan with a considerable scale appeared from the end of 2018 to the beginning of 2019.
On April 25, while the stock market was undergoing a sharp adjustment, Hangzhou Dptech Technologies Co.Ltd(300768) , Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) , Henan Hengxing Science & Technology Co.Ltd(002132) , Weihai Guangtai Airport Equipment Co.Ltd(002111) and other companies formulated stock repurchase plans. Companies such as Jiangsu Hengrui Medicine Co.Ltd(600276) , Shenzhen Jinjia Group Co.Ltd(002191) , Runner(Xiamen) Corp(603408) , etc. buy stocks directly.
On April 26, another group of companies began to buy back their own shares Sanan Optoelectronics Co.Ltd(600703) announced that on April 26, the company implemented the first share repurchase by means of centralized bidding transaction. The number of shares repurchased by the company for the first time was 11469900, accounting for 0.26% of the current total share capital of the company. The highest transaction price was 17.80 yuan / share, the lowest transaction price was 16.95 yuan / share, and the total amount paid was 19816979542 yuan.
Hubei Dinglong Co.Ltd(300054) also announced that on April 26, 2022, the company bought back 3209400 shares in the form of centralized bidding transaction for the first time, accounting for 0.34% of the company’s total share capital of 940593015 shares. The highest transaction price was 15.78 yuan / share, the lowest transaction price was 15.07 yuan / share, and the total amount paid was 5009409900 yuan.
Zhejiang Longsheng Group Co.Ltd(600352) 26 also announced that the total amount of funds to be repurchased is no less than 500 million yuan and no more than 1 billion yuan.
brokers yelling golden pit
“The market showed signs of stabilization after falling below 2900. According to the comprehensive evaluation, the gold pit near 2900 is this year.” After early trading on April 26, Chen Guo, managing director and chief strategy officer of China Securities Co.Ltd(601066) securities, made the latest judgment.
Chen Guo said that this year’s golden pit is near 2900. There are four specific logic:
First, now is the most pessimistic moment of epidemic expectation. In fact, the epidemic prevention and control is constantly improving and should not be pessimistic. It is expected to resume work soon, which is expected to become an important clue in the market.
Second, now is the moment when the gap between economic and policy expectations is the largest. 2900 points reflect the market’s pessimism about the economy, but in fact, the logic of steady growth has not been destroyed, but is increasing. Generally speaking, I don’t think that this year’s economic growth target will be significantly lowered. On the contrary, the economic situation in the second quarter will make a new round of steady growth policies launched faster and more vigorously.
Third, the most pessimistic stage of global inflation expectations is over. The biggest source restricting the valuation environment of the A-share market this year comes from overseas inflation expectations. However, with the recent rapid correction of the real interest rate of US bonds, under the background of the unresolved conflict between Russia and Ukraine, the international oil price has peaked and dropped, the implied medium-term inflation expectation of us tips has also peaked, and the core inflation data of the United States has begun to have low expectations. It can be basically judged that the most pessimistic stage of global inflation expectation is over.
Fourth, in the coming quarter, the improvement trend of the whole internal and external environment is a high probability event, although the process is likely to be repeated.
Debang securities also said that at present, the market panic is close to the extreme value. Whether from the rapid depreciation of the exchange rate, the rise of asset linkage, or the extreme value of sentiment indicators, the panic decline in the short-term market may come to an end. However, the crux of the market trend shift lies in the changes in the internal and external environment. At present, the dawn of the short-term improvement of the crux is to wait for the social aspect of the epidemic in Shanghai to be cleared. The closing period of the first quarterly report, the meeting of the Political Bureau, the interest rate meeting of the Federal Reserve in May, the epidemic situation in Shanghai and even the whole country, and the resumption of work and production are several important observation points at present. Overall, the policy bottom has been continuously consolidated, and the economic bottom is expected to be proved in the second quarter
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China Securities Co.Ltd(601066) strategy Chen Guo: this year’s golden pit is near 2900
