Recently, many departments have issued policies to enhance market vitality, encourage long-term funds to enter the market and further stabilize market expectations. Industry experts believe that the cost performance of medium and long-term allocation of A-Shares is prominent, and the space for long-term funds to enter the market is expected.
policy combination and stable expectation
Recently, the regulators have timely issued corresponding policies and measures to stabilize the expectations of the capital market. China Securities Depository and Clearing Co., Ltd. recently issued a notice that from April 29, 2022, the overall stock transaction transfer fee will be reduced by 50%, that is, the stock transaction transfer fee will be charged from 0.02 ‰ of the transaction amount of A-Shares in the current Shanghai and Shenzhen market, 0.025 ‰ of the transaction amount of A-Shares in Beijing market and shares of listed companies, and will be uniformly reduced to 0.01 ‰ of the transaction amount.
Citic Securities Company Limited(600030) research points out that the adjustment will make a profit of about 5 billion yuan to market investors every year, expressing positive signals and guiding the positive expectations of the market. This is a continuation of the reform ideas of regulators to reduce transaction costs for investors and improve the service capacity and efficiency of the capital market since 2022. After improving the market liquidity through the reform of cash for goods, we will further stimulate the enthusiasm of investors by directly transferring profits and promote the healthy development of the capital market.
In fact, reducing the transfer fee of stock trading and reducing the transaction cost is one of the recent measures to stabilize the expectation of the capital market. Recently, around reasonably guiding market expectations, a series of regulatory statements and policies have been launched one after another, boosting market confidence.
The meeting held by the Political Bureau of the CPC Central Committee on April 29 pointed out that we should respond to market concerns in a timely manner, steadily promote the reform of the stock issuance registration system, actively introduce long-term investors and maintain the smooth operation of the capital market. On April 22, Yi Huiman, Secretary of the Party committee and chairman of the CSRC, presided over the Party committee (expanded) meeting. The meeting stressed the need to respond to market concerns in a timely manner, guide market expectations, stimulate market vitality and potential, further improve market resilience and promote the stable and healthy operation of the capital market.
Prior to this, on April 21, Yi Huiman, chairman of the CSRC, held a symposium for the main principals of the national social security fund and some large banking and insurance institutions to listen to opinions and suggestions on promoting the high-quality development of the capital market and guiding more medium and long-term funds into the market.
On April 26, the CSRC issued the opinions on accelerating the high-quality development of the public fund industry, proposing to actively cultivate professional asset management institutions and improve the proportion of medium and long-term funds. Do a good job in the implementation of individual pension investment public fund policies. 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 funds and other forms, and implement long-term assessment.
A-Shares have prominent valuation advantages
From the perspective of market valuation level, statistics show that according to the overall method, the average p / E ratio of Shanghai A shares is 12.53 times, that of Shenzhen A shares is 29.89 times, and that of gem is 54.14 times, which are all at a historical low since 2018. Globally, Dongxing Securities Corporation Limited(601198) research points out that the valuation of A-Shares is still in a relative depression. In 2022, A-share PE (TTM) was at a low level in the past four years. The historical quantiles of PE (TTM) of the main A-share index were 1.30% of China Securities 500, 25.10% of Shanghai stock index, 33.90% of gem index, 32.50% of all a shares, 37.40% of Shanghai and Shenzhen 300 and 41.80% of Shanghai Stock Exchange 50 respectively.
Through the analysis of four dimensions of macro indicators, market indicators, sentiment indicators and capital indicators and eleven indicators such as valuation and turnover, China Industrial Securities Co.Ltd(601377) believes that most indicators of the current A-share market have reached or close to the bottom level of the historical market and are already in the middle and long-term bottom area Citic Securities Company Limited(600030) believes that judging from the structural characteristics of transaction congestion, the recent capital outflow mainly comes from hot money and retail investors. Judging from valuation, redemption and position, the position adjustment and reduction of institutional funds are at the end, and the market sentiment has dropped to the low point since 2018. The dynamic P / E ratio of the main indexes has also fallen below the 25% quantile since 2010, of which the main blue chip index is below the 10% quantile since 2018. The long-term fundamentals of China’s economy will not change. The medium and long-term allocation cost performance of the current index is prominent.
long term funds have a large market space
The medium and long-term allocation cost performance brought by the valuation advantage of A-Shares is attracting the attention of long-term funds. A person from the asset management center of an insurance company told the reporter of the economic information daily that generally speaking, the market stocks enter the bottom area, which is an opportunity for institutions to gradually start considering building positions at present. In the future, there will be more room for long-term funds to enter the market. However, the newly added funds of institutions are not much, and the adjustment of stock structure also needs a gradual process.
According to the data from the China Banking and Insurance Regulatory Commission, by the end of 2021, China’s insurance fund utilization balance was 23.2 trillion yuan, including 9.1 trillion yuan in bonds, 2.5 trillion yuan in stocks and 0.7 trillion yuan in equity funds. In addition, the balance of portfolio insurance asset management products issued and managed by insurance asset management companies is 3.2 trillion yuan, mainly invested in bonds, stocks, etc. Insiders said that pension and insurance funds, as the most important long-term capital sources in the capital market, can effectively support the steady operation of the capital market. At present, compared with overseas mature markets, the proportion of long-term funds entering the market in China is not high and the intensity of entering the market is insufficient. There is still much room for improvement in the future.
