Positive factors continue to accumulate, institutions are bullish on the A-share medium and long-term market – Times Finance – Northern Net

In recent times, the A-share market has faced greater pressure. The Shanghai Composite Index fell below the 3,000-point mark, and market sentiment has reached a freezing point. Since late August, a number of favorable policies, including investment and financing reform and reform of the dividend system for listed companies, have been implemented one after another, and economic data in the third quarter have also shown improvement.

Industry insiders said that the current policy signals are clear and positive market factors are accumulating. From a mid- to long-term perspective, the equity market has fully priced fundamentals and risks, but it will still take some time for investors to recover from pessimism. It is expected that the market is in the bottoming stage, and the overall opportunities outweigh the risks.

　　Positive factors continue to accumulate

Since August this year, a number of favorable policies have been implemented in the A-share market. The recently released third-quarter economic data has also shown improvement. Policy signals have gradually become clearer, and positive factors in the market are constantly accumulating.

The China Securities Regulatory Commission recently announced that it will revise the “Regulatory Guidelines for Listed Companies No. 3 – Cash Dividends by Listed Companies” and the “Guidelines on the Articles of Association of Listed Companies” related to cash dividends and will publicly solicit opinions from the public. The Shanghai and Shenzhen stock exchanges have also simultaneously revised and improved the standardized operation guidelines for listed companies and clarified operational requirements. Industry insiders said that the revision of the new dividend regulations will help solve many problems existing in the current dividend distribution process of listed companies, encourage listed companies to increase the frequency and quantity of dividends, convey long-term development confidence to investors, and continue to enhance the vitality and attractiveness of the capital market.

Earlier on October 11, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank successively issued announcements and received notification from the controlling shareholder Huijin to increase their holdings by a total of more than 100 million shares. Huijin plans to continue to increase its stake in the four major banks in the secondary market in its own name within the next six months (counting from the date of this increase). The market generally believes that Huijin’s increase in its holdings in banking stocks will help boost confidence in the currently weak market.

Previously, many measures have been implemented, including lowering stamp duty, reducing the ratio of financing margins, tightening IPO and refinancing in stages, standardizing quantitative transactions, regulating the reduction of holdings by major shareholders, and strengthening countercyclical adjustments in securities lending business.

In terms of macro fundamentals, recently released data show that industrial production has grown steadily, and the value added of industries above designated size in the first three quarters increased by 4% year-on-year, with the growth rate accelerating by 0.2 percentage points from the first half of this year. Enterprise efficiency has accelerated. Among them, in August, the profits of industrial enterprises above designated size increased by 17.2% year-on-year, and operating income and profits both turned from negative to positive. Judging from the GDP growth rate, the GDP in the first three quarters increased by 5.2% year-on-year, of which the growth rate in the third quarter was 4.9%, which was much higher than market expectations.

“The pessimism of A-share investors has entered the extreme zone, and positive factors are accumulating.” CITIC Securities said that the economic data in the third quarter exceeded market expectations, and it is expected to continue to show an improvement trend in the fourth quarter; the market clearing speed is accelerating, and the adjustment of white horse stocks It is expected to release funds on the market.

　The market bottom is gaining momentum

Although the current market has not responded significantly to the successive policy signals, from a medium- to long-term perspective, institutions generally indicate that the equity market has adequately priced fundamentals and risks, but investors’ pessimism still needs to be restored. some time. At present, it can be expected that the market is in the bottom-building stage, and the overall opportunities outweigh the risks.

Last Friday (October 20), the Shanghai Composite Index fell below the 3,000-point mark for the first time this year. On October 23, the three major indexes continued their decline, with the latest point of the Shanghai Composite Index being 2939.29 points. Since October, the Shanghai Composite Index has fallen by more than 5%, and the Shenzhen Component Index and the ChiNext Index have both fallen by more than 6%.

“It takes time to repair pessimism. The market is likely to digest the downturn with sideways fluctuations. We are not pessimistic in the medium to long term.” West China Securities said that the recently released third-quarter economic data was better than market expectations, but the domestic stock and bond markets both performed weakly. , reflecting that investor sentiment remains sluggish. Currently, A-shares are in the mid- to long-term bottom range, and it is not recommended to be overly pessimistic: on the one hand, policies are working hard from macroeconomic fundamentals, active capital markets, etc., and will eventually be priced into the stock market; at the same time, the overall valuation of A-shares is at a relatively high level. At a low level, there is limited room for continued decline, and there is a greater chance of sideways shocks to digest the downturn. Huijin’s increase in its holdings in the four major banks, central enterprises’ increase in holdings and share repurchases are expected to drive OTC funds into the market.

“The Shanghai Composite Index has fallen below 3,000 points and is close to the low in October last year. The equity market has fully pessimistically priced fundamentals and risks, and the overall market opportunities outweigh the risks.” Ping An Securities also pointed out that despite the recent increase in overseas disturbances , but the trend of marginal improvement in the domestic economy is still continuing, and new policies for active capital markets such as securities lending and dividend distribution are still being introduced, which is expected to jointly promote an improvement in market expectations and a rebound at the bottom.

“The economic data for the third quarter released last week exceeded expectations, but the market’s response was muted. The Shanghai Composite Index adjusted and fell below an important psychological mark. The core contradiction in the current domestic stock market is not short-term GDP and listed company EPS growth, but mid-term uncertainty. How it will be resolved in the future is the key to whether the market can give a valuation.” Guojun Strategy further analyzed that although the economic data improved marginally in September, it did not dispel the market’s doubts about growth momentum; in addition, domestic and foreign financial conditions are in Recently, there has been a synchronized contraction, with the 10-year U.S. Treasury yield once exceeding 5%. Tightening financial conditions coupled with geopolitical conflicts have caused uncertainty in equity risk assets. The rapid risk release in the stock market is close to the historical extreme level, and the market itself is expected to compete repeatedly around the long-term trend line to form a periodic market bottom.

　　Foreign-funded institutions are optimistic about market prospects

Affected by multiple internal and external factors, northbound funds from the Shanghai-Shenzhen-Hong Kong Stock Connect have experienced large fluctuations this year. As of October 23, northbound funds have sold more than 37.1 billion yuan in net sales since October. In the opinion of experts, it is not appropriate to use northbound funds as a “wind vane” for A-share investment. At the same time, there are still many foreign-funded institutions that are bucking the trend and deploying Chinese markets and Chinese assets.

Recently, foreign institutions such as UBS AG and BARCLAYS BANK PLC have frequently appeared in the list of the top ten holders of newly established and listed ETFs. Previously disclosed ETF mid-term reports also show that among the top ten holders of ETFs tracking mainstream broad-based indexes such as Science and Technology 50, CSI 300, and Shanghai Stock Exchange 180, foreign institutions have also appeared many times.

In addition, the updated disclosure information on the China Securities Regulatory Commission website on October 18 showed that Schroder Funds declared the “Schroder China Dynamics Equity Securities Investment Fund.” It is reported that this is the company’s first active equity fund invested in the Chinese stock market. In addition, many foreign fund companies such as Fidelity and Neuberger Berman have stated that they will actively invest in actively managed stock funds in China in the near future.

Many well-known international institutions have also accelerated their investment and business expansion in China this year or expanded their business scope. For example, the China Securities Regulatory Commission approved on January 19 that Standard Chartered Bank (Hong Kong) Co., Ltd. invested 1.05 billion yuan to establish a wholly-owned subsidiary of Standard Chartered Securities (China) Co., Ltd., which became the first wholly foreign-owned securities company approved by the China Securities Regulatory Commission; the Beijing Securities Regulatory Bureau on July 28 Approved the securities investment fund sales business qualifications of HSBC Insurance Brokers Co., Ltd.

Zhang Lan, general manager of Schroders Fund, said that the Chinese market is a market worthy of long-term and patient cultivation. At present, the overall valuation of A-shares is at a historical low, and the market has become relatively safe. From a mid- to long-term perspective, we are optimistic about the direction of technological upgrades and consumption upgrades related to economic transformation, and combined with policy stimulus and some positive data signals, we are confident in China’s capital market.

Goldman Sachs Research Department has also previously expressed its view of maintaining an overweight position on Chinese stocks. The equity strategy team of Goldman Sachs Research Department issued a research report predicting that China’s stock market is expected to have upward trading opportunities before the end of this year, driven by five factors: accelerated easing policies, cyclical improvements, good market technology, low valuations, and low positions. .