“From the historical vertical comparison, the current market valuation level has dropped significantly to the bottom area.” “The current position is low enough, and the bottom probability is not far away.” “Many high-quality companies have shown very good long-term investment opportunities.” Recently, the situation outside China has changed beyond expectations, and the financial market has encountered resonance adjustment. Under the complex situation, some people choose to avoid the limelight, while others consider timely layout. Institutional sources said that after entering the current point area, the A-share market risk has been fully released, the medium and long-term investment value has gradually emerged, and the long-term funds are expected to usher in the layout opportunity.
market risk fully released
Opportunities come out, yes. In the view of some insiders, since this year, the volatility of the A-share market has increased and the adjustment range is not small, which shows that the market has a more sensitive response to various short-term internal and external risk factors and sufficient pricing. At present, the valuation of A-Shares has entered a relatively low area, and the risk return ratio of investment has been repaired. For medium and long-term funds, the “winning rate” of investment has increased rapidly.
“From the perspective of valuation level, the valuation of CSI 300 index has been at a low level; the compound return of public funds has returned to near the historical average, the excess return has returned a lot from last year’s high, and the market risk has been fully released.” Dong Chengfei, chief research officer of Ruijun assets, said recently.
China International Capital Corporation Limited(601995) chief strategist and managing director Wang Hanfeng said that this round of market adjustment took a long time and a large range, and the valuation has been at a relatively low level. “The market is in the ‘bottom grinding period’ in the short term, and the middle line has value.”
“Grinding bottom period” is the most “grinding people”. However, after this period, the rebound may not be far away. The “bottom grinding period” also “temper people”, which can “grind” out good opportunities. It is a time to patiently choose good sectors, good stocks and layout long-term opportunities.
The increasingly strong signals of stabilizing expectations and stabilizing market policies have also boosted the confidence of value investors. According to Xinhua news agency, the 11th meeting of the central financial and Economic Commission held on April 26 stressed that mobilize the strength of the whole society, build a modern infrastructure system, realize the unity of economic benefits, social benefits, ecological benefits and security benefits, serve major national strategies, support economic and social development, and lay a solid foundation for building a modern socialist country in an all-round way. On the same day, the CSRC issued the opinions on accelerating the high-quality development of the public fund industry to promote the public fund to better play an important role in the reform, development and stability of the capital market. The previous day, while officially reducing the RMB deposit reserve ratio, the people’s Bank of China further announced that it would reduce the foreign exchange deposit reserve ratio by 1 percentage point from May 15, which showed a clear policy attitude of reducing costs and stabilizing the exchange rate.
If we focus on the dimension of one year or more, the current market fully reflects the pessimistic expectations of the epidemic situation, geographical situation and other factors, and has high investment value, especially some growth sectors with long-term development space. “Lu Bin, investment director and fund manager of HSBC Jinxin fund, said recently that the more difficult the market is, the more it is necessary to” believe in common sense and seize opportunities.
Recently, the repurchase scale of listed companies has increased, and the net subscription of ETF has increased, indicating that some funds are taking advantage of the “grinding bottom” of the market.
medium and long-term capital positive attitude
“Throughout the development of global capital markets, the continuous introduction of long-term incremental funds is not only the ‘ballast’ of the ‘slow bull’ in the stock markets of developed countries, but also the ‘sea god needle’ for mature markets to resist various external risks.” According to Li Xunlei, the chief economist of Zhongtai Securities Co.Ltd(600918) group, with the restoration of the risk return ratio, the willingness of long-term money to enter the market is rising, and the regulatory authorities should give timely encouragement and guidance, which will help give play to the positive role of medium and long-term capital in stabilizing the market.
The Symposium on institutional investors held by the CSRC recently further released the policy signal of encouraging and guiding long money into the market. The opinions on accelerating the high-quality development of the public fund industry proposes to increase the proportion of medium and long-term funds, continue to promote insurance, financial management, trust and other asset management institutions to increase the actual proportion of equity investment through direct investment, entrusted investment, public fund and other forms, and implement long-term assessment.
Encouraging and guiding long-term money into the market is a consistent policy orientation. The industry expects that under the current situation, it is expected to usher in more substantive measures to accelerate the promotion of market investment philosophy and the optimization of the main structure of participation.
In terms of equity investment quota, many institutions still have room for improvement. According to the statistics of China Securities Journal, the average stock position of 36 active equity sub new funds established in late January was 53.83% at the end of the first quarter. Among the sub new funds that have rapidly established positions, fund products with a holding period of more than 1 year dare to improve their stock positions. “This shows that medium and long-term funds are optimistic about the long-term development prospects of the market. These fund managers have expressed their views with their stock positions.” Huabao securities fund analysts said.
market ecology is expected to be gradually optimized
It can be expected that further increasing the proportion of medium and long-term funds will be one of the key contents of the reform and development of the A-share market in the future. In the view of some market participants, the current market adjustment to a low level just provides a better opportunity to promote this work.
In the process of further promoting the two-way opening of the capital market, the introduction of overseas long-term funds is still a major attraction. According to Wang Chunying, deputy director of the State Administration of foreign exchange and spokesman, as the market digests some short-term factors, overseas institutions’ investment in China’s securities will return to a steady state, and long-term value investment is still the main consideration. “We have observed positive policy signals, and the further implementation of supporting policies is expected to attract overseas investors to return to the A-share market.” Qian Yujun, chairman of UBS Securities, said.
The institutional construction of a virtuous circle between long-term capital and capital market is worth looking forward to. In the view of many institutions, the recently introduced personal pension system is a good start, which is expected to bring a stable long-term capital supply to the capital market. Industry insiders expect to continue to improve the tax preferential policies to encourage medium and long-term investment, promote the relaxation of the proportion and scope of various medium and long-term funds entering the market, and relax the restrictions on medium and long-term funds participating in private securities funds. Dongdengxin, director of the Institute of Finance and securities of Wuhan University of science and technology, said that at present, China’s medium – and long-term equity products are still lacking. We should further increase the supply of medium – and long-term equity products, strengthen research and development cooperation with overseas institutions, and guide more families to allocate equity assets.
In the process of deepening the ecological capital market reform, it is expected to be more suitable for the long-term capital market. Experts believe that improving the rule of law in the capital market, severely cracking down on illegal acts such as fraudulent issuance, and continuously improving the quality of listed companies will enhance the market attraction and create a better market environment for long-term investment.
The scenery is long, so it’s better to look at it. Li Xunlei believes that there have been some irrational declines in the market recently, and the valuation has moved down more. However, the profit growth of listed companies is still faster than the GDP growth, and policies such as promoting the entry of medium and long-term funds into the market will further boost market confidence. “Historically, after every low point, the market will usher in excellent investment opportunities.” He said.
