How will A shares perform in the last five trading days before the official closing in 2023?
The Paper collected the opinions of 10 brokers. Most brokers think that although the market is relatively depressed near the end of the year, with the positive changes in the internal and external environment, the inflection point of the market and confidence is approaching, and the bottom signal is gradually clear, rebounding or coming at any time.
CITIC Securities said that in the last five trading days of each year in the past four years, the average income of public offering of heavyweight stocks was positive, and the market’s economic expectations had much room for improvement compared with the policy objectives, and the turning point of market and confidence was approaching.
"At present, a series of indicators such as A-share valuation level, transaction and behavior of listed companies show that asset prices may have implied too pessimistic expectations, and correspondingly, the internal and external environment is showing positive changes. Extreme valuations are superimposed with positive factors, and A shares rebound or come at any time. " CICC pointed out.
Guotai Junan Securities further pointed out that considering the deep adjustment of the previous market, it is unlikely that the short-term index will continue to fall, and it is expected to enter a low shock and technical rebound in a short time window.
In terms of configuration, a number of brokers reminded investors to pay attention to the rotation of the sector near the end of the year.
Huaxi Securities reminds investors that the acceleration of plate rotation at the end of the year will become the main feature, and the style of large and small plates may be short-term balanced due to the relative valuation price comparison.
CITIC Securities: The market clearing is drawing to a close.
Statistics show that in the last five trading days of each year in the past four years, the average income of public offering of heavyweight stocks is positive, and the superimposed real estate policy is in the observation period. It is expected that it will continue to increase in the future, and there is much room for improvement in the market’s economic expectations compared with the policy objectives. Looking forward to the market outlook, the turning point of market and confidence is approaching, and the middle of January next year is the key time.
On the one hand, the northbound capital outflow since August this year has come to an end before Christmas. Since last week, according to the channel survey data of CITIC Securities, the net redemption rate of sample Public Offering of Fund products has dropped significantly. Statistics show that the average income of the top 100 heavyweight stocks in Public Offering of Fund in the last five trading days of each year in the past four years is positive, and the market clearing is nearing completion.
On the other hand, the real estate policy is in the observation period after landing, and it is expected that the follow-up policies will continue to be overweight. In January next year, the probability of LPR reduction is high, and there is still much room for improvement in the market’s expectation of economic growth relative to the policy objectives. The game industry policy that exceeds expectations will help ease the speculative atmosphere of "speculating small" in the near future and strengthen the market’s confidence in growth sectors with strong policy certainty such as hard technology.
CICC: Rebound or Come at Any Time
Since the beginning of the year, the overall performance of the index has been rising first and then declining, especially near the end of the year. The Shanghai Composite Index was as low as near the bottom of the stage at the end of April and October last year. At present, a series of indicators such as valuation level, transaction and behavior of listed companies show that asset prices may have implied too pessimistic expectations, and correspondingly, the internal and external environment is showing positive changes.
First, a number of domestic banks have recently announced that they will lower the deposit listing interest rate, and loose policies will help stabilize growth. Second, the State Press and Publication Administration made a quick response to the "Measures for the Administration of Online Games" (draft for comments) that attracted market attention on Friday, which helped to maintain stability expectations. At present, the "consistency of macro-policy orientation" in the environment has been enhanced, which is conducive to "strengthening policy coordination, ensuring the same direction and forming a joint force".
Overseas, the interest rate of long-term US debt dropped rapidly from the high point of 5% to around 3.9% in the context of persistently low inflation data in the United States, the US dollar index weakened, and the RMB exchange rate strengthened, while China’s equity assets temporarily failed to respond to this.
Looking forward to the market outlook, extreme valuation will accumulate positive factors, A shares will rebound or come at any time, and the medium-term opportunities in the market outweigh the risks.
Citic Securities: The bottom signal is getting brighter.
Last week, the State Press and Publication Administration issued the Administrative Measures for Online Games (Draft for Comment). The draft document continues the previous regulatory thinking, and there is still room for further revision. However, the market not only reflects the fundamental expectations, but also feeds back the panic of strengthening supervision in some industries in mid-2021.
Looking forward to the market outlook, in the medium term, with the marginal improvement of fundamental expectations and low valuation, further stabilizing expectations and verifying policy signals are expected to catalyze the excessive pessimism on the emotional side to rebound, and now we are waiting for the spring breeze.
In terms of configuration, the historical resumption shows that the market value before the extreme bottom is relatively resistant to decline, and small-cap stocks may experience compensatory decline. With the improvement of overseas liquidity and the stabilization of foreign capital, the market value of foreign capital with high pricing power may be boosted, and high dividend and valuation repair direction can be used as a strategy of both offensive and defensive.
In terms of industry, the allocation idea can be defensive first, waiting for the turning point signal of policies and high-frequency data, and investors are advised to pay attention to coal, banking, electronics, innovative drugs, electricity, nonferrous metals and so on.
Guotai Junan Securities: The oversold rebound is expected to appear.
Looking forward to the market outlook, the deep adjustment of the index shows that investors have recalibrated their policy expectations after important meetings, and the interaction between the follow-up economic data and policies is extremely important to the market.
The valuation of the short-term index and the turnover of the two cities have fallen to historical lows. Considering the deep adjustment of the previous market, it is unlikely that the short-term index will continue to fall, and it is expected to enter a low-level shock and technical rebound in a short time window. However, it is expected that the upward revision still needs a new margin and the index height is not high.
At the same time, after the third round of deposit interest rate cuts in the year, the market’s expectation of interest rate cuts reopened, overlapping the allocation needs of some institutions at the end of the year and the beginning of the year, but relatively speaking, small-step easing is more conducive to debt-like assets and long-term assets, non-economic related assets.
From a further perspective, the improvement of corporate profit expectations and market risk appetite still needs further efforts of policies and the clarity of new development models. Therefore, the medium-term response still needs to be "stable".
In terms of allocation, the current market is "marginal in trading, but it is expected to be marginal". The marginal allocation power comes from medium and long-term funds with cross-year allocation needs, rather than high-risk preference investors who trade theme stocks. Looking for oversold and rebound, the main idea is to choose stocks whose previous valuations have been revised sharply and their valuations are at a low level. Therefore, some mid-and large-cap growth stocks adjusted in the previous period, such as pharmaceuticals, electronics and military industry, may have a chance to rebound.
In addition, the balance between the two financial institutions has declined significantly recently. The focus of the oversold rebound market should be on large-cap stocks rather than small-cap stocks. The defensive sectors with low-risk characteristics should be selected for the bottom positions, and the growth stocks should be flexibly selected for oversold rebound.
Shen Wan Hongyuan Securities: Still need patience.
On the whole, the short-term market is still in a dilemma. At present, the market has a full understanding of the structural problems of China’s economy, so it has high expectations for the stimulus policy and high preconditions for doing more A-share pro-cyclical assets.
But at the same time, some investors have insufficient confidence in the effect of the policy. The steady growth of market transactions "don’t see rabbits without spreading eagles" does not reflect changes in policy statements, but needs to wait for specific policy implementation and effect verification, which is already a short-term core market feature.
On the whole, the first quarter of 2024 may be a window where many important meetings are superimposed. The domestic steady growth policy is expected to be refined, the specific policy landing effect will begin to enter the verification period, and the reform may also have an incremental layout. However, in the immediate time window, it is difficult for the market environment to change significantly, and the timing of the change needs some patience.
In terms of configuration, we are optimistic about procyclicality and the rebound of core assets: first, Huawei chain innovation; second, export chain and new multinational companies, new consumption; third, special evaluation in a broad sense.
Industrial Securities: Out of the Bottom
Looking ahead, under the impact of multiple factors, the market has come to the bottom area. At the same time, a series of positive signals are emerging, which is expected to drive the market out of the bottom step by step.
First of all, the recent domestic policy efforts have been accelerated, and further policy easing measures such as RRR cuts, debt package and real estate relaxation have gradually landed.
Secondly, at the level of funds, the layout funds are already returning. Since December, 100 million yuan of A-shares laid out by investors through stock ETFs (especially broad-based ETFs that track the Shanghai and Shenzhen 300 and Kechuang 50 indexes) has once again ushered in a rise, becoming an important fund for the market.
Looking back, with the gradual recovery of the market, the current position ratio of domestic absolute income institutions represented by private equity and insurance is at a low level, and there is more room for adding positions, and the mood of public investors is expected to gradually pick up.
Overseas, the global risk appetite is expected to be repaired under the significant drop in the interest rate of US debt and the easing of exchange rate pressure. Recently, inflation and employment data have given the Fed a relaxed "step down", and at the same time, Federal Reserve Chairman Powell unexpectedly stood up after the FOMC meeting in December, further strengthening the expectation of interest rate cuts.
In terms of configuration, the industries that are expected to have good flexibility in the future include consumption (beer, snack food, air transportation, innovative drugs, biological products, medical services, beauty care), manufacturing (military electronics, satellite communications, lithium batteries, wind power), TMT (semiconductor materials, optical fiber cables) and cycle (rare earth). In the short term, if the bottom of the market is repaired, the above industries have high allocation value.
China Merchants Securities: Shanghai and Shenzhen 300 are welcoming the twilight of dawn.
At present, the Shanghai and Shenzhen 300 Index is extremely valued, or deviates from the trend of other major assets. But recently, many real economic indicators have turned positive, indicating that the economy is improving. From a rational and medium-and long-term perspective, the Shanghai and Shenzhen 300 are welcoming the twilight of the bottom dawn.
At present, scientific and technological innovation has become the most important direction of policy support, and the opportunities brought about by stronger government fiscal expenditure are also worthy of attention. At the same time, judging from the recent macro changes, the Fed will move towards easing next year, and the marginal improvement of external demand is a high probability event.
Therefore, "technological innovation+export" and "technological innovation +To G" are expected to become important clues to the industry layout next year. At the industry level, investors can pay attention to electronics, automobiles and parts superimposed by AI technology innovation and export improvement. In addition, we can pay attention to the investment opportunities in the fields of computers, industrial metals, building materials and household appliances brought about by the increase of government expenditure and the start of the three major projects.
Huatai securities: partial oscillation operation
Looking forward to the market outlook, after the Central Economic Work Conference, the policy landing and effect are to be tested. At present, the market has entered a data vacuum period, and the characteristics of capital stock have not changed fundamentally, or it is decided that the short-term market will still fluctuate.
Next, we can focus on whether the credit derivatives (the scissors difference between M1 and M2) can rebound, the structural indicators (the proportion of broken net/floor line stocks) and when contrarian funds will signal the bottom. Before the above variables show positive changes, the dumbbell strategy may still be dominant to maintain the core idea of reducing volatility.
In terms of allocation, it is suggested that investors should still use dividend low-wave assets as their base positions, and more attention should be paid to high dividend sectors and generalized dividend varieties in dividend assets.
In terms of industry, at the end of the year, we can find flexibility by short-term game boom strategy and smart driving theme, and pay attention to electronics, medicine, machinery, agriculture, transportation and so on.
Huaan Securities: Maintain the shock.
Looking forward to the market outlook, the general trend of external risk mitigation will not change, while the confidence of internal investors in economy and policies still needs to be restored, and the market’s upward momentum is weak, so there is no need to worry about drastic adjustment without risk reversal overseas. Therefore, it is expected that the market will remain volatile.
On the one hand, after the adjustment of the Central Economic Work Conference is stable, the policy adjustment will not change until the convening of the two sessions in 2024, and it is difficult to reverse the pessimistic policy expectations of the current market as a whole. The internal risk appetite still needs to be boosted, and the follow-up focus will be on whether the policy landing can exceed expectations.
On the other hand, before the release of important macro data such as GDP growth rate in 2023 in 2024, the economy maintained a slow recovery expectation. Therefore, there is a rising momentum in the follow-up market, which may require an opportunity for policy landing to exceed expectations or economic data to exceed expectations.
In terms of configuration, investors are advised to combine long and short. Among them, in the short term, the market style may be changing, and finance is expected to be a good direction. In the medium and long term, the definite direction can continue to be adhered to.
Huaxi securities: the rotation is accelerating
Judging from the turnover, main index valuation and risk premium of the A-share market, the current A-share market is in the middle and long-term bottom range, investors tend to price the medium and long-term problems in the short term, and the market risk appetite needs to be repaired.
Looking forward to the market outlook, the annual working meetings of ministries and commissions and local two conferences will be held one after another in the next 1-2 months, which can focus on three policy guidelines: first, the third round of deposit interest rate reduction during the year or the space for policy interest rate reduction at the beginning of next year; The second is to pay attention to the relaxation effect of real estate policies in first-tier cities. Before the fundamentals of the real estate market stabilize, demand-side easing policies in various places are expected to continue to be introduced; Third, in addition to fiscal, monetary and real estate policies, we can pay attention to the implementation of non-economic policies.
In terms of style, the acceleration of plate rotation at the end of the year will become the main feature, and the style of large and small plates may be short-term balanced due to relative valuation.
In terms of industry, investors can use the low valuation dividend sector with abundant cash flow as the ballast stone, and pay attention to the areas that will benefit from industrial catalysis and expected policy improvement, such as Huawei’s industrial chain, semiconductors and consumer electronics.
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Translated by melanie Michel | Wang Feiyue
