The collapse of high-level conglomerates is the main reason for the sharp fluctuation of market sentiment at the beginning of the year. It is expected that investors\’ confidence in steady growth policies and economic stabilization will continue to strengthen, and market sentiment will be boosted with the redefinition of the main line of steady growth. The starting point of the market in the first half of the year is approaching, and it is expected to appear before the festival. First of all, the rapid adjustment of high-level conglomerates has induced investors to “cut high to low” and reduce positions. Concerns about the strength of steady growth policies have induced mutual position exchange, resulting in the main line confusion in the first half of the month. However, the market has passed the most panic point of sentiment, and what is missing is the consensus in the main line direction. Secondly, we expect that the centralized landing of last year’s economic data will make the market form more consistent expectations for this year’s steady growth, the formation of policy synergy is on the way, and the market’s economic expectations for 2022 will be gradually revised. Finally, incremental funds began to stabilize and resume inflow. The clarification of the main line of stable growth will significantly improve market sentiment. It is expected that the starting point of the market in the first half of the year before the festival. It is suggested to continue to focus on the “three low positions”.
the collapse of high-level stocks was the main reason for the sharp fluctuation of market sentiment at the beginning of the year
1) the rapid adjustment of high-level conglomerates has induced investors to “cut high to low” and reduce positions. in the first two weeks of January, the average rate of return of common stock funds was – 5.3%, the median was – 5.6%, and the rate of return of most products was – 8% ~ – 4%. In the same period, the rates of return of Shanghai and Shenzhen 300, gem index, Kechuang 50, new energy vehicle, photovoltaic, semiconductor and military index were – 3.3%, – 4.3%, – 6.1%, – 6.1%, – 5.2%, – 10.0%, – 8.4% and – 10.9% respectively. It can be seen that although the profit growth rate of the high track plate may fall sharply this year, which is the expectation of the market at the end of last year, most investors in the heavy track plate did not significantly adjust their positions at the end of last year. The sudden collapse of High-level Track stocks at the beginning of the year led to the correction of the market’s excessive fundamental expectations. Among the sample companies that have published the performance forecast, the average rise and fall of individual stocks with “pre happy” performance on the next day and the third day after the disclosure of the forecast were only 0.75% and 0.05% respectively, significantly weaker than the same period in previous years. Worried about over valuation and fundamental expectations, the collapse of High-level Track stocks has induced investors to “cut high to low” and take the initiative to reduce their positions, and the rapid adjustment of the market has induced some institutions to reduce their positions passively. Channel research data show that in November last year, the positions of active private equity institutions that actively increased their positions and participated in popular tracks and theme varieties decreased slightly by 1.4 percentage points compared with a month ago.
2) concerns about the strength of the steady growth policy triggered the exchange of positions, leading to the confusion of the main line in the first half of the month. with the rapid rise of relevant sectors and individual stocks on the main line of low and stable growth, the fluctuation of market sentiment itself began to affect the stability of investors’ positions in these low-level sectors in the early stage. Taking the real estate industry chain and infrastructure related sectors as an example, the rise and fall of construction, building materials, real estate and transportation from December 2021 to the first week of 2022 were 11.4%, 12.8%, 11.8% and 7.8% respectively. The rise and fall of light industry and household appliances in the real estate chain were 9.4% and 12.0% respectively. The short-term relative income has been very significant. Under the influence of large short-term growth and emotional fluctuations, some events this week amplified investors’ concerns about the landing of steady growth. For example, on Tuesday, some overseas media reported that China’s new special bond amount in 2022 may be the same as that in 2021, which is still 3.65 trillion yuan. After the news was released, there were obvious negative reactions in the stock market and bond market on the same day. However, in fact, with the carry forward amount, even assuming that the amount is flat, the special bond funds actually available in 2022 can reach 4.35 trillion yuan, and the market selectively amplifies negative information. These concerns have caused investors to waver in the stable growth related sectors that have increased greatly in the early stage and have obvious excess returns. Some investors have gradually adjusted their positions from the low-level sectors to try to copy the bottom, and the track sector has rebounded through the game; With the rebound of the track plate, investors who still have heavy positions continue to sell, resulting in frequent switching of high and low plates this week, and the main line of the market is disordered again.
3) the market has passed the most panic point of sentiment, and what is missing is the consensus on the main line direction. although the market adjustment at the index level is large, the scattered hot spots at the plate level have also begun to increase recently. Under the background of cultural self-confidence and the rise of domestic content, the media sector continued to maintain a high popularity. Benefiting from the support of medical insurance policy, the traditional Chinese medicine sector, which can not implement DRG payment temporarily and has a relatively stronger anti centralized collection ability than generic drugs, began to make efforts. The medical devices boosted by the demand for home self-testing of overseas covid-19 launched a new round of rapid upward market this week, In addition, many small and medium-sized market value companies in line with the characteristics of “specialization and innovation” have also been active recently. The common feature of these active sectors is that the previous valuation has been low for a long time, the institutional position is low, and the game is weak. The rapid rise of these scattered plates shows that the market has passed the stage of indiscriminate panic selling, and the funds in the floor are still very abundant and willing to participate in the low-level plates. At present, what investors lack is only the consensus on the main direction of the stable growth market.
it is expected that investors’ confidence in steady growth policies and economic stabilization will continue to strengthen
1) it is expected that the centralized landing of economic data last year will make the market form a more consistent expectation of steady growth this year. the “annual report” of China’s economy will be released next week. The macro group of Citic Securities Company Limited(600030) Research Department predicts that China’s GDP will increase by about 8%, the increase of consumer prices will be less than 1%, more than 12 million new urban jobs will be created, and the urban survey unemployment rate will remain at a low level of about 5%. Although we still face the triple pressure of shrinking demand, supply shock and weakening expectation, the time when the economic pressure is the greatest may have passed. The new changes in the epidemic situation have brought some new challenges, but on the basis of continuing to do a good job in “external defense input and internal defense rebound”, China has more and more experience in management and control. The short-term disturbance of the epidemic situation will not change the core trend of the economy. The landing of economic data itself will also ease the market’s concerns about the strength of steady growth policies or economic downturn. If the data is less than the market expectation, the expected probability of the follow-up steady growth policy will further heat up. If the data exceeds the expectation, it is verified that the end of last year is the bottom of this round of economic downward cycle, and the consensus of investors that the macro economy is resilient and has begun to repair upward will be strengthened.
2) the formation of policy synergy is on the way. It is expected that the market’s economic expectation for 2022 will be gradually revised. this round of steady growth policy portfolio is characterized by multiple forces, and higher weight is given to industrial and structural adjustment. Recently Xi Jinping the general secretary published “constantly strengthening, optimizing and expanding China’s digital economy” in Qiushi, emphasizing the importance of enabling the digital economy; On January 14, the Ministry of industry and information technology, the national development and Reform Commission and other ten departments jointly issued the guiding opinions on promoting the orderly transfer of manufacturing industry, emphasizing the importance of long plate forging and short plate supplement; On January 16, the national development and Reform Commission issued the notice of the national development and Reform Commission on doing a good job in promoting consumption in the near future, and launched 10 promotion fee initiatives; In addition, from the list of major projects implemented in some local provinces and cities this year since the beginning of the year, it can also be seen that the importance of industrial investment in many provinces has exceeded that of traditional infrastructure.
These policy combinations are no longer simply reflected in the obvious expansion of money or finance at the aggregate level, so the apparent catalytic effect on the market in the short term is insufficient. However, it is only a matter of time for the policy to form a better than expected effect around the four dimensions of new infrastructure, manufacturing upgrading, real estate stabilization and promotion fees. The factor that most suppresses investors\’ economic expectations in the short term is the increased pressure on China’s epidemic control and its impact on the service industry and consumption. As the “result item” of macroeconomic operation, consumption is difficult to be directly stimulated by policies. However, we believe that as the epidemic spread is gradually controlled, local epidemic prevention and control measures will gradually return to normality after the Winter Olympic Games, and the negative disturbance of the epidemic to the consumption and service industry will also be rapidly alleviated in the second quarter.
market sentiment will be boosted by the redefinition of the main line of steady growth , and the starting point of the market in the first half of the year is approaching
1) incremental funds began to stabilize and resume inflow, and the clarification of the main line of steady growth will significantly improve market sentiment. despite the negative impact of the market at the beginning of the year, the “good start” of the new issuance of public equity products is less than the market expectation, we do not think that the cold of the new issuance in the past two weeks can simply extrapolate the subsequent issuance status. In the past two weeks, many public offering and private placement products with high reputation have quickly reached the target of raising quota, and the application and redemption rate of stock public offering products has also remained relatively stable. The data of Citic Securities Company Limited(600030) channel research shows that the net redemption rate has basically remained at 0.2% ~ 0.3%, lower than the historical average. The net inflow rate of foreign capital slowed down month on month in January, but the absolute scale is not low. As of January 14, the cumulative net inflow of northbound funds was 13.6 billion yuan. For the new energy sector with large recent adjustment, foreign capital began to flow on bargain hunting. In the past half month, the cumulative net inflow of configured foreign capital into the new power industry reached 7.64 billion yuan. In addition, it significantly increased its holdings in the pro cyclical financial sector with undervalued value, such as the banking and non banking sectors, which received net inflows of 2.97 billion yuan and 1.78 billion yuan respectively. On January 14, the China Securities Regulatory Commission announced the launch of the reform of goods and silver payment in the A-share market, which is the last step of the four reform suggestions put forward by MSCI after the last round of improvement of the A-share inclusion factor. The reform of the capital market system is expected to promote overseas index companies to start the next plan to improve the A-share inclusion factor, bringing significant incremental funds. With the subsequent consensus on the main line of stable growth gradually formed, the inflow of incremental funds will significantly improve market sentiment.
2) it is expected that the starting point of the market in the first half of the year will appear before the festival, and the firm layout will continue around the “three low positions”. the emotional impact brought by the release of high-level holding stocks is coming to an end. We expect that with the continuous strengthening of investors\’ confidence in steady growth policies and economic stabilization and the continuous improvement of the consensus on the main line of steady growth, their confidence and sentiment in the market will also be boosted, and the starting point of the market in the first half of the year is approaching. In terms of configuration, we continue to recommend “three low levels”, specifically including: varieties whose fundamentals are expected to remain low, focusing on midstream manufacturing suppressed by cost problems in the early stage, such as vehicle, lithium battery cell, photovoltaic equipment , tax exemption and Entertainment content consumption whose fundamentals are expected to remain low; For the varieties whose valuation is still relatively low, it is recommended to pay attention to high-quality developers, building materials and home furnishing enterprises after the expected mitigation of real estate credit risk, Hong Kong stock Internet leaders after the impact of China stock market, and fine chemical enterprises with new business capabilities such as new materials; High boom varieties with relatively low stock prices after adjustment, such as intelligent driving, auto parts , and semiconductor equipment, power semiconductor, xinchuangyi and military industry driven by localization logic.
risk factors
The global epidemic situation is repeated and the vaccination is not as expected; The friction between China and the United States in the field of science and technology trade has intensified; The progress of China’s economic recovery is less than expected; Macro liquidity at home and abroad tightened more than expected.
