Yesterday, the A-share market adjusted significantly. The Shanghai stock index fell below 3000 points, down 5.13%, the largest one-day decline in more than two years.
On the same day, the market “squatting” was comprehensively affected by many factors, but in addition to the adjustment, some positive factors also began to emerge. For example, some institutions believe that the market valuation adjustment may be close to the limit, and the more important thing in the future is the profit expectation. With the sharp adjustment of the market, the indexes gradually enter the value range, and investors should not be overly pessimistic.
Shanghai stock index recorded the largest decline in more than two years
On April 25, the A-share market fell sharply, and the Shanghai stock index fell below the integer mark of 3000 points, down 5.13%, the largest one-day decline in the past two years after February 3, 2020, and all major industry sectors fell across the board.
According to the statistics of the reporter of the securities times, a total of more than 700 stocks fell by the limit at the close of the day, more than 800 stocks fell by 10% or more, and more than 2500 stocks fell by more than 8%. Such a large-scale deep decline of individual stocks is relatively rare in recent years.
In an interview with reporters, GUI Haoming, a senior market person, believed that the market had been greatly adjusted due to the superposition of factors such as the sharp decline of the overseas market last Friday, the devaluation of the RMB, the repeated epidemic and the recent large-scale break of new shares.
Huaan Securities Co.Ltd(600909) also listed some main reasons for the sharp decline in the market on that day, including the upcoming interest rate meeting of the Federal Reserve, the continuous strengthening of monetary tightening expectations, and the sharp correction of US stocks, which constrained the external risk appetite of a shares; The market is more worried about the future economic prospects; Negative news of some representative stocks increased, and investors’ performance expectations were revised down; The RMB exchange rate continued to depreciate rapidly, and concerns about capital outflow increased.
equity asset investment value highlights
With the market adjustment, there are still some differences in the views of institutions and experts on the future market.
GUI Haoming believes that at present, the market has not seen any signs of stopping the decline. For investors, they may need to wait for the market to really stabilize before making a decision.
However, it is worth noting that some positive factors that may affect the market are gradually emerging. From the perspective of valuation, the valuation of A-share market is gradually lower than the average level in recent years, and even has obviously tended to be underestimated Western Securities Co.Ltd(002673) ‘s strategic point of view is that, on the whole, the current market valuation adjustment is close to the historical limit level. From the price comparison relationship between stocks and bonds, the difference between the current implied yield of A-Shares and the yield of 10-year Treasury bonds has also reached a new high since the financial crisis in 2008, indicating that the investment value of equity assets is prominent. With the promotion of the epidemic policy and the landing of the Fed’s interest rate hike boots in May, the market is expected to usher in a rebound window in the future. In the medium term, investors need to pay attention to the change of market investment style from industry rotation based on PEG (price earnings ratio relative to profit growth ratio) to value investment style based on pb-roe (price book ratio return on net assets) under the downward revision cycle of profit expectation.
Bohai Securities also believes that from the perspective of outlook, short-term A shares will still face risks such as the epidemic, the final stage of performance release and the landing of the Fed’s interest rate hike boots, and the negative factors remain to be cleared. However, in terms of the current risk premium, the risk return of the Shanghai index exceeding the risk-free return rate is 6.0%, close to the historical extreme level since 2015.
Some listed companies or important shareholders buy back and increase their holdings when the stock price is depressed, demonstrating their confidence in the future market. For example, when the share price fell sharply on Monday, the leading pharmaceutical company Jiangsu Hengrui Medicine Co.Ltd(600276) bought back Jiangsu Hengrui Medicine Co.Ltd(600276) released the announcement of the first share repurchase, which showed that on April 25, Jiangsu Hengrui Medicine Co.Ltd(600276) repurchased 750000 shares for the first time by means of centralized bidding, and the total amount paid was 223852 million yuan (excluding transaction costs). On the same day, Jiangsu Hengrui Medicine Co.Ltd(600276) fell by the limit, and the company’s share price has fallen by more than 40% since the beginning of the year.
That night, a number of A-share companies, including Beijing Tongtech Co.Ltd(300379) , Sichuan New Energy Power Company Limited(000155) , Shanghai Bright Power Semiconductor Co.Ltd(688368) , Qilu Huaxin, disclosed plans to increase their holdings of important shareholders or directors, supervisors and senior executives.
Huaan Securities Co.Ltd(600909) believes that the internal and external important meetings are about to be held, and the weakness is grinding to the bottom or coming to an end, waiting for the oversold rebound signal Sealand Securities Co.Ltd(000750) strategic view is that with the sharp adjustment of the market, the indexes gradually enter the value range and should not be overly pessimistic.
