On May 20, the volume of Shanghai and Shenzhen stock markets rose, and the Shanghai stock index finally stood at 3100 points.
As of the close, the Shanghai Composite Index rose 1.6% to 314657 points; The Shenzhen Composite Index rose 1.82% to 1145453 points; The gem index rose 1.69% to 241735.
Northbound funds bought 14.236 billion yuan on the same day, and the single day net purchase reached a new high since December 9, 2021 and the highest single day net inflow since 2022. Among them, the net inflow of Shanghai Stock connect was 10.374 billion yuan and that of Shenzhen Stock connect was 3.862 billion yuan.
So far, the total net inflow of northward funds this week was 15.218 billion yuan. However, since 2022, there has been a net outflow in the north direction, with a total net outflow of 12.495 billion yuan.
Specifically, on May 20, the top ten active stocks of Shanghai Shenzhen Stock connect ranked first in net purchases of China Merchants Bank Co.Ltd(600036) ( China Merchants Bank Co.Ltd(600036) ), Wuliangye Yibin Co.Ltd(000858) ( Wuliangye Yibin Co.Ltd(000858) ), Kweichow Moutai Co.Ltd(600519) ( Kweichow Moutai Co.Ltd(600519) ), with net purchases of 710 million yuan, 674 million yuan and 596 million yuan respectively.
Contemporary Amperex Technology Co.Limited(300750) ( Contemporary Amperex Technology Co.Limited(300750) ) was the largest net seller, with an amount of 275 million yuan Ganfeng Lithium Co.Ltd(002460) ( Ganfeng Lithium Co.Ltd(002460) ) and Goertek Inc(002241) ( Goertek Inc(002241) ) were sold for 233 million yuan and 180 million yuan respectively.
Lei, chief research official of Xingshi investment, pointed out that on May 20, the people’s Bank of China lowered the five-year LPR interest rate by 15bp, exceeding market expectations. Fang Lei believes that this is a link in the combination of stable growth policies, reflecting the policy orientation of stable growth and reducing the burden for the resident sector, which is conducive to the continued interpretation of “wide credit”. As the medium and long-term loans such as manufacturing medium and long-term loans, fixed asset investment loans and personal housing loans refer to the five-year LPR, the reduction of interest rate may lead to the continuous expansion of total credit and the marginal improvement of credit structure.
“From the perspective of market performance, the LPR reduction has greatly boosted the stock market sentiment and enlarged the stock market trading volume. At present, A-Shares may have entered a stage more sensitive to profit. In the follow-up, with the promotion of broad credit and the stabilization of the economy, the stock market confidence will continue to be in the recovery channel.” Fang Lei said.
Xia Fengguang, manager of financial intelligence investment fund of paipai.com, believes that Friday’s strength is the depth and continuation of the whole week’s market. It can be seen that the following factors support the strength of the current A-share market. First, the momentum of resumption of work and production is rapid. Second, targeted fiscal and monetary policies have hedged the economic downturn and helped stabilize investor confidence. The policy is expected to be intensively implemented before the end of May. Third, the RMB exchange rate has initially stabilized after the early impact. Fourth, the trend of China concept shares is becoming clear, which has formed a better support for the Hong Kong stock market and brought a better peripheral environment for a shares. In the medium term, as the above factors will continue, and the main indexes are adjusted from last year, both space and time are sufficient, the bottom of this round is still in the composition stage, and there is still the power to further expand space upward in the future.
“Under the background of the serious tear of expectation difference and the abundance of OTC funds, with the reconstruction of performance expectations, the market is further switching to the structural market with value as the main line. The five-year LPR interest rate cut is expected to reconstruct better expectations, patiently wait for the money making effect to form, and drive the accelerated return of value.” Lin Jiayi, CEO of Xuanjia finance, said that with the gradual resumption of work and production and the return of the economy to normal, market confidence will gradually return. In this context, the policy continues to increase the weight of steady growth, which will directly drive the industries with a large proportion of GDP in the field of steady growth and the leading enterprises with undervalued value. Cost effective assets are in the highest return range in history. Most of the current rebound is expected to go out of a relatively consistent and sustained growth trend. With the rebound, cash such as money inside and outside the market and over-the-counter savings can also be predicted to be gradually overweight to form profitable assets.
Goldman Sachs China equity strategy research team believes that the return of investment recovery beneficiary stocks has become attractive. Looking to the future, the team judged that ensuring the resumption of work and production and the normalization of the supply chain are still the policy priorities. Therefore, manufacturing related stocks will take the lead in this process, and then consumer activities will follow up and realize normalization. Consumer related stocks are expected to rebound later in the year. Focusing on the manufacturing economy will bring more favorable returns to investors engaged in recovery trading.
