A shares start in September!
On the first trading day of September, the broader market fluctuated and diverged throughout the day, with the three major indexes rising and falling. By the close, the Shanghai Composite Index was up 0.43%, the Shenzhen Component Index was up 0.44%, and the ChiNext Index was down 0.11%.
On September 1, the number of A-share individual stocks rising and falling was basically the same. The trading volume of Shanghai and Shenzhen was 745.3 billion yuan, a decrease of 83.9 billion yuan from the previous trading day, and the trading volume continued to shrink. Trading in the Stock Connect was suspended today due to the typhoon.
On the market, a total of 22 of the 31 Shenwan primary industries closed higher, and 9 industry sectors closed down. Coal, steel, non-ferrous metals, household appliances, building materials, light manufacturing, commerce and retail and other sectors rose first. On the downside, the TMT sector led the decline today. Specifically, communications, computers, media, environmental protection, medicine and biology, electronics and other sectors fell first.
"Coal Flying Dancing Steel Splash"
Today is a day of "coal flying and dancing steel splash", and cyclical stocks are actively rising as a whole.
The coal sector led the gains of various industry sectors with a 4.04% increase. All 37 stocks in the sector closed higher. Among them, Yuncoal Energy and Shaanxi Black Cat 10CM rose to the limit, Huayang Shares, Shanxi Coking Coal, Pingmei Shares, Yankuang Energy rose by more than 7%, and many stocks such as Shaanxi Coal Industry and Jinkong Coal Industry followed suit.
The steel sector jumped 2.27%, second only to the "coal boss". 42 stocks in the sector closed higher, while only 2 stocks closed lower. Specifically, HBIS Resources rose to the limit, and Baosteel Shares, CITIC Special Steel, and Ordos rose by more than 4%.
Property growth was less than expected
Boosted by favorable policies, the real estate sector opened stronger, and fluctuated lower in the afternoon, closing slightly up 0.44%. Zhongdi Investment rose to the limit, *ST Oceanwide, China Merchants Shekou, Jinke Co., Ltd., Vanke A rose more than 3%.
In terms of news, on August 31, the People's Bank of China and the State Financial Regulatory Administration jointly issued the Notice on Adjusting and Optimizing Differentiated Housing Credit Policies and the Notice on Reducing the Interest Rate of the First Set of Existing Housing Loans:
1. Unify the lower limit of the national policy on the minimum down payment ratio of commercial personal housing loans. No longer distinguish between cities that implement "purchase restrictions" and cities that do not implement "purchase restrictions", and the minimum down payment ratio of commercial personal housing loans for first and second homes is unified to not less than 20% and 30%.
2. Adjust the lower limit of the interest rate policy for two housing to not less than 5-year LPR plus 20 basis points; The lower limit of the policy on the interest rate for the first home remains at not less than 5-year LPR minus 20 basis points.
3. From September 25, 2023, borrowers of the first commercial personal housing loan of the stock can apply to the lending financial institution to issue a new loan to replace the commercial personal housing loan of the first set of housing in stock.
"The property stimulus policy has not been echoed by the relevant sectors." Zhao Yuanyuan, investment director of Jianhong Times, said that under the influence of demographic factors and other major trend factors, the real estate stimulus policies since last year have not achieved significant results. Investors are cautious, and only an upturn in actual data can boost confidence. The consumption stimulus policy is relatively weak at present, but the direction of increasing disposable income of residents is correct. "Policy has always been a camera choice, and I believe there will be more stimulus policies in the future."
Why the rebound is not strong
"This week is a process of further strengthening of the policy bottom." Xia Fengguang, fund manager of Rongzhi Investment, told reporters that the main indexes rose this week, with the CSI All Index rising by more than 3%, and some strong indexes, such as Science and Technology Innovation 50 weeks, rising by more than 7%.
In terms of news, on August 27, the policy "combination fist" for the capital market was introduced, the Ministry of Finance and the State Administration of Taxation announced the halving of stamp duty from August 28, 2023, and the China Securities Regulatory Commission issued three announcements, involving optimizing IPO and refinancing supervision, further regulating share reduction, and reducing the proportion of financing margins.
Despite the epic favorable policy "escort", the upward strength of the A-share rebound is not good. Why is that?
"For optimists, they will feel that in the context of intensive policy releases, the index should have a V-shaped reversal. However, objectively, the market has its own operation law, and the market price trend is closely related to policy and macroeconomics, but it is not subordinate to each other. Xia Fengguang said.
Wang Zheng, general manager of Shangyi Investment, told reporters that although the policy change has actively responded to the market call, it will have a significant effect on improving the market investment environment and boosting investors' risk appetite, and these measures also convey a clear signal that the decision-making level and the regulatory layer are protecting the market. However, the short-term trend of the market can be affected by a variety of factors such as the flow of funds and the sentiment, policy and news reflected behind it, and these uncertainties have been reflected in the first three trading days of the week. "Therefore, there is some uncertainty about whether A-shares will be dominated by fundamental factors in the short term."
In Zhao Yuanyuan's view, in the past week, the favorable market policies mainly focused on the four measures to activate the capital market and the real estate stimulus policy, but neither of the policies has been very effective in improving the market. She believes that the reasons why the measures to activate the capital market are not obvious mainly lie in the following two aspects: first, these measures have been partially reflected in the previous expectations of the capital market, which is conducive to cashing; Second, at the Jackson Hole meeting, the hawkish statement of the Fed reinforced the expectation of another interest rate hike, and the northbound lacked inflow momentum.
Zheng Yanxin, general manager of Guangdong Guoxin Industry Research Institute, believes that in the context of the epic policy favorable at the end of last weekend, Monday opened high and low, followed by some wide range shocks, on the one hand, reflecting the determination and efforts of decision-makers and regulators to improve market sentiment, on the other hand, it also reflects excessive pessimism in investor sentiment.
Zheng Yanxin further said that with the support of policies that exceeded expectations, the rebound was not good. The deep-seated reason for this is that the majority of shareholders do not have sufficient understanding and cognition of policies, the atmosphere of short-term speculation is strong, and the short-term speculative mentality of "small profit is security" and "small profit is running" is obvious.
The market bottom may follow
"In a bear market, it will take time for the pessimism to subside. The current policy intends to protect the stock market with clear intentions, and the index is still relatively low, which is a good time for odds. Xia Fengguang said.
Xia Fengguang believes that from a macro point of view, the manufacturing PMI in August has risen for the third consecutive month, although the absolute value is still below 50, but the trend of improvement at both ends of production and demand has initially formed. With support for real estate on the credit side, the momentum of the economic recovery will be consolidated in the coming months. After the policy bottom and the economic bottom are confirmed successively, the bottom of the market may not be far away. Now to increase the allocation of bulls in the bottom area or better countermeasures, you can actively pay attention to the two main lines of policy beneficiaries and growth.
For the future market, Zheng Yanxin expressed optimism. In his view, on the one hand, according to the current policy "carding" rhythm, the market has reason to believe that the bottom is clear and the layout of China's high-quality assets is timely; On the other hand, with the regulators' emphasis on the construction of listed companies' IPOs, shareholding reductions and other institutional construction, the soil of A-shares will be healthier in the future, which is a long-term systematic optimization.
"We believe that in the near future, under the guidance of a sound institutional framework, the senior management of A-share listed companies will be more enterprising and more patterned, which will also affect the confidence and attention of shareholders to the core value of the enterprise, thereby reducing speculative mentality and returning to the origin of investment." Zheng Yanxin said.
From a medium to long-term perspective, Wang Zheng believes that market trends will still reflect the fundamentals of the industry or company and the return of performance-driven valuations. Looking ahead, corporate earnings are also expected to improve as the domestic economy continues to recover and policies to stabilize growth are introduced. At present, the characteristics of the "bottom" of A-shares are obvious, and with the emergence of the "policy bottom", the "market bottom" may follow. The market will show a trend of "short-term grinding bottom but medium and long-term volatility upward", and investors do not need to be too discouraged about the future market.
Fu Rong Fund believes that the policy "combination fist" has a substantial benefit to the capital market, or can reverse the spread of panic to a large extent, and form a short-term support for the capital market. While short-term macroeconomic growth expectations remain weak, the likelihood of an economic stall is significantly reduced after the Politburo meeting made positive statements. From the perspective of half a year to one year, although there are short-term fluctuations after the "policy bottom", the characteristics of the medium-term bottom range are obvious. We are optimistic about the opportunities for volatility in the current position of the market, and structurally focus on investment opportunities in growth sectors. Industry focus: growth tracks such as semiconductors, computers, medicine, photovoltaics and other sectors; Opportunities for leading companies in consumption and real estate under the logic of economic recovery; Revaluation of assets of state-owned enterprises such as construction, electricity, telecommunications, etc.