A shares fell sharply again yesterday, and the trading was relatively depressed. The three major indexes opened low and went low, with a decline of more than 2%. The Shanghai index closed below 3500 points. In this regard, market experts believe that it is not appropriate to overreact to the decline of the stock market. At present, A-Shares have relatively solid support in terms of policy and capital. The trend of "steady growth" of the economy is clear, and the market in spring is still worth looking forward to. Many institutions also expect that the "market bottom" is gradually approaching.
Xun Yugen, chief economist of Haitong Securities Company Limited(600837) put forward that the recent decline of A-Shares was more affected by geopolitical factors and peripheral markets. It coincided with the eve of the Spring Festival holiday, and the capital activity also decreased. However, historically, the impact of geopolitical factors on the equity market is often relatively short-lived. After the emotional response, we are still optimistic about the performance of the A-share market in the next quarter.
Chen Hongbin, chief economist, believes that the recent weakness of the A-share market is mainly affected by five factors, including the expectation of the Federal Reserve to raise interest rates, the geopolitical crisis in Ukraine, some market views are worried about the economic trend, global inflation and repeated covid-19 pneumonia. He believes that on the whole, these factors will have some emotional impact on investors, but they have little real impact on the medium and long-term trend of the stock market.
Experts believe that China's current policy and capital have formed a relatively strong support for the A-share market, and it is not appropriate to overreact to the market decline.
From the perspective of policy, the central economic work conference proposed that this year's economic work should be stable and seek progress in stability. All parties should actively launch policies conducive to economic stability, and the policy force should be appropriately advanced. The meeting proposed that we should continue to implement an active fiscal policy and a prudent monetary policy, coordinate and link fiscal and monetary policies, and organically combine cross cyclical and counter cyclical macro-control policies.
Since then, various parties have successively launched a series of policies and measures to stabilize growth. Since January 17, the central bank has successively reduced the MLF bid winning interest rate by 10 bp, the one-year lpr10 BP and the five-year LPR BP. Recently, the Ministry of housing and urban rural development said that the construction of affordable rental housing this year raised 2.4 million units, exceeding the previous expectation of 2 million units; The State Grid announced that it plans to invest 501.2 billion yuan in power grid investment in 2022, a record high; The Sixth Plenary Session of the State Council proposed to launch more practical and hard moves conducive to boosting effective demand, strengthening supply guarantee and stabilizing market expectations; Recently, the executive meeting of the State Council decided to continue the policy of tax reduction and fee reduction due in part to support the relief and development of enterprises; The national development and Reform Commission issued the notice on doing a good job in promoting consumption in the near future, and put forward 10 work measures.
Xun Yugen said that China's macro policy of "steady growth" is continuously increasing. The end of the year and the beginning of the year are often the "off-season" of fundamentals, but it is the "peak season" of policies. Chen Hongbin also proposed that under the deployment of the central economic work conference, the policy support for the economy this year will be very solid, various "steady growth" measures will be gradually refined and introduced after the central economic work conference and before the two sessions, and the A-share market will also usher in a more intensive window period of favorable policies.
From the perspective of capital, on the one hand, China's macro liquidity is abundant, and the central bank has strengthened open market operation and put more abundant liquidity into the market; On the other hand, since this year, foreign capital has maintained a net inflow trend, expressing its optimism about the A-share market with real gold and silver. At the same time, although the major stock indexes in Shanghai and Shenzhen have fallen a lot this year, the balance of transaction settlement funds of brokerage customers has always remained at about 1.8 trillion yuan.
Public information shows that since January 17, the cumulative net capital invested by the central bank has reached 750 billion yuan. In the past two days, the central bank has continuously carried out 14 day reverse repo operations to maintain stability and cross spring festival liquidity.
Haitong Securities Company Limited(600837) statistics show that although the main A-share indexes have performed poorly since the beginning of the year, northbound funds have been increasing their positions against the trend. As of January 20 this year, the net inflow of funds from the North reached 42.85 billion yuan, exceeding 39.96 billion yuan in January 2021; The daily average net inflow of northward funds here is 3.06 billion yuan, which is also higher than the daily average net inflow of northward funds over the years. Some market institutions predict that the net inflow of funds to the north this year may range from 300 billion yuan to 400 billion yuan.
Xun Yugen believes that at present, the PE level of the whole A-share market is about 18.5 times, which is at a historically medium and low level, and has the attraction to capital. In the context of the decline in the prosperity of the real estate market and the net worth transformation of bank financial management, residents' funds prefer equity assets with high liquidity and good profitability, and the incremental funds in the stock market are expected to flow in continuously. Chen Hongbin said that the market strength may become more and more obvious after the second quarter. Although there will not be a big market in the A-share market this year, the structural market is still worth looking forward to.
Most institutions are not pessimistic about the post holiday market and believe that the "market bottom" of A-Shares is gradually approaching. For example, China International Capital Corporation Limited(601995) believes that in the future, with the continuous introduction of "stable growth" policies, the possible improvement of forward-looking indicators and the gradual stabilization of economic growth, market sentiment is also expected to be repaired. Citic Securities Company Limited(600030) said that the "emotional bottom" is coming, and it is expected that the market capital will resume inflow. The "market bottom" is gradually approaching. It is suggested to continue to focus on the "two low" layout of blue chips to meet the starting point of the market in the first half of the year.
China Securities Co.Ltd(601066) the securities strategy team said that after the Spring Festival, the market risk appetite may improve, and the issuance of new funds is expected to pick up. If the FOMC meeting of the Federal Reserve next week makes the expectation of raising interest rates bearish, it is expected to form a favorable time window after the festival. It is suggested that investors cherish and grasp the upcoming counter attack market.
