Affected by multiple factors, the A-share market has been declining recently, and investment confidence is facing a great test. In this regard, the interviewed experts unanimously stated that don’t be afraid of floating clouds to cover your eyes. At present, you should have confidence in the A-share market.
“We are fully capable and qualified to overcome difficulties and challenges.” Many brokerage analysts told the Shanghai Securities News that the characteristics of China’s large economic development potential, sufficient toughness and wide space have not changed, the trend of innovation and development has continued, and the economic structure has been adjusted and optimized. For long-term investors, the current is a good opportunity for layout.
On April 26, the three major indexes of the A-share market continued to fluctuate. Since April, affected by multiple factors, the overall correction range of the A-share market has been large, and the three indexes have fallen by more than 10%.
In this regard, Everbright Securities Company Limited(601788) managing director and chief macroeconomist Gao Ruidong believes that there are three main reasons leading to the downturn of market performance: first, the weakening of economic expectations, and the implementation of closure management in some cities due to the newly confirmed cases of covid-19 pneumonia, affecting enterprise production and residents’ consumption, impacting enterprise profits and residents’ income, and then affecting economic expectations; Second, the export expectation has weakened, and the epidemic has impacted China’s industrial chain to a certain extent, resulting in the transfer of export orders to Southeast Asia and dragging down export related sectors such as textiles and clothing; Third, the Fed continued to accelerate the pace of raising interest rates and shrinking the table, recovered liquidity from the world, and the high yield of US bonds led to the upside down of the interest rate gap between China and the United States, promoted the rapid depreciation of the RMB exchange rate, and exacerbated capital outflows and market risk aversion.
However, Wang Sheng, deputy general manager and chief strategist of Shenwan Hongyuan Group Co.Ltd(000166) Securities Research Institute, believes that the probability of short-term factors constituting medium-term downside risk has been reduced, maintaining the judgment of “bottom in the second quarter and opportunity in the third quarter”. The decline in fundamentals will be realized in the second quarter and is expected to resume growth and achieve marginal improvement in the third quarter. “Short term over pessimistic expectations have emerged, and the rebound of A-Shares may be not far away.”
Although the global situation faces many variables, respondents are generally optimistic about the medium and long-term investment trend of a shares.
Gao Ruidong is full of confidence in China’s economy. He said that in the face of the intertwined situation of the century and the epidemic situation in the century, China’s monetary and fiscal policies moved forward, the economy operated smoothly in the first quarter, the main macro indicators remained within a reasonable range, and the economy remained expanding.
In Gao Ruidong’s view, actively expanding effective investment is the focus of current macro policies. “It is expected that the growth rate of infrastructure investment will continue to rebound in the first half of the year. On the one hand, it will hedge the downward pressure of the economy, on the other hand, it will help to optimize the supply structure and promote high-quality development.”
Wang Sheng is expected to take the lead in China’s economic recovery in the second half of 2022. As the epidemic prevention and control situation continues to improve, the supply chain will gradually recover, and export and other fields will gradually stabilize. “Looking forward to the second half of the year, the verification of China’s export competitiveness will contribute to the recovery of overall confidence and is expected to bring new investment lines to a shares.”
Meanwhile, according to Dai Kang, the Gf Securities Co.Ltd(000776) chief strategist, the inflation benefit chain and steady growth chain have comparative advantages. First, the situation in Russia and Ukraine has strengthened the expectation of supply contraction, and the supply-demand gap in the upstream resources and materials industry is expected to continue; Second, the “old-fashioned” steady growth industry, which plays the role of economic “stabilizer”, has fundamentals and valuation repair expectations; Third, the steady growth of consumption and post epidemic repair will bring about the reversal of profit expectations in the leisure service and hotel industry.
In addition, Dai Kang said that compared with overseas countries, China has more policy space and can cope with medium and long-term uncertainty; China’s continued capital market-oriented reform will help A-Shares attract diversified long-term funds. “In the long run, there are still many positive factors in China’s stock market.”
