The sudden drop is good! The major change node is coming

CBN

2024-07-02 16:52CBN official account

The full text is 1963 words, and it takes about 6 minutes to read, so help me highlight the key points

Highlight the point

On the first trading day of 017, A-shares ushered in a long-lost good start, with the Shanghai Composite Index rising nearly 1%, close to recovering 3,000 points.

02 The People's Bank of China announced that it will carry out treasury bond borrowing operations for some primary dealers in the open market, which will trigger changes in treasury bond yields and affect the structure of the A-share market.

03 In the first half of the year, the keyword of A-shares was "New National Nine Articles", which aims to strengthen supervision in an all-round way, effectively prevent and resolve risks, and promote the high-quality development of the capital market.

04 Due to the implementation of the "New Nine Measures", the market generally expects that a comprehensive and three-dimensional regulatory system will be gradually established to promote the ecological optimization and internal stability of the capital market.

05However, accelerating the clearance of garbage companies is the only way for the high-quality development of the capital market, the market ecology will be further purified, and the value of A-share investment will be reshaped.

Technical support is provided by Tencent Hybrid Model

(The author of this article is Fu Yifu, senior researcher of Xingtu Financial Research Institute)

On the first trading day of July, A-shares ushered in a long-awaited good start. Among them, the Shanghai Composite Index rose nearly 1%, and it is close to recovering 3,000 points; The Wind All-A Index also rose 0.75%, with more than 3,500 shares in the market closing in the red, while real estate, coal, rare earth and other sectors performed eye-catching throughout the day.

It is worth mentioning that the People's Bank of China announced yesterday that in order to maintain the steady operation of the bond market, on the basis of prudent observation and evaluation of the current market situation, it has decided to carry out treasury bond borrowing operations for some primary dealers in the open market in the near future. Subsequently, treasury bond futures of multiple maturities plunged, and it seems that the change in treasury bond yields is affecting the structure of the equity market and the subsequent trend of A-shares.

Keywords for A-shares in the first half of the year. In my opinion, the most important word is the "new national nine".

On April 12, the State Council issued the "Several Opinions on Strengthening Supervision and Risk Prevention and Promoting the High-quality Development of the Capital Market", proposing to deeply grasp the main connotation of the high-quality development of the capital market and achieve the stable and healthy development of the capital market in serving major national strategies and promoting high-quality economic and social development. The "Opinions" consists of 9 parts, which is the third "National Nine Articles" for the capital market - this is also the capital market guidance document issued by the senior level again after the two "National Nine Articles" in 2004 and 2014.

Different from the previous two times, the core tone of the "New National Nine Articles" lies in the strict word, and the overall requirements put forward that it is necessary to comprehensively strengthen supervision, effectively prevent and resolve risks, stabilize the tone, and strictly take the lead, so as to ensure that the supervision is "long teeth and thorns", with edges and corners; In the next five years, the overall framework for the high-quality development of the capital market will be basically formed, and the tone of the wording will be significantly tougher than in the past, reflecting the determination and belief of the regulator to promote the healthy development of the capital market with higher and stricter standards.

On the whole, the specific details in the "Nine Articles of the New Country" can be said to directly hit the current pain points of A-shares, which are comprehensive and exciting. The market generally expects that with the implementation of the new "National Nine Articles" and subsequent supporting rules, a comprehensive and three-dimensional regulatory system will be gradually established, which will promote the ecological optimization of the capital market and enhance its internal stability. At that time, the chaos in the capital market is expected to be rectified, the value will be reshaped, the quality of listed companies is also expected to be further improved, and the majority of investors will also obtain a more ideal return on investment.

However, from another point of view, all reforms must be painful, and the "New National Nine Articles" are no exception.

For example, many of the provisions in the "New Nine Articles" will directly affect those listed companies whose fundamentals are not strong and whose dividends are not up to standard. These garbage companies not only have generally poor fundamentals, but also often have fraudulent issuance, financial fraud, illegal reduction, insider trading and other illegal acts, which seriously endanger the ecology of A-shares, so it is the general trend to promote the clearance of garbage companies. Especially since late May, the number of companies that have been ST has increased sharply, which has also triggered a panic sell-off of small-cap stocks in the market, which has dragged down the enthusiasm of the entire market and directly caused the continuous adjustment of the broader market.

Objectively speaking, accelerating the clearance of garbage companies is indeed the only way to promote the high-quality development of the capital market, which also fully demonstrates the determination of the regulator to rectify the chaos in the capital market, and also the resolute implementation of the "New National Nine Measures". We should believe that with the completion of the rectification of various negative problems, the market ecology will be further purified, and the value of A-share investment will also be reshaped, and the majority of investors will be expected to obtain more ideal and stable investment returns, and the future of the capital market will be more secure - don't forget, after the first two "national nine articles" were introduced, the market has all come out of a magnificent bull market, during which the market rose to 6124 points and 5178 points respectively.

Of course, there are still many problems that need to be resolved. For example, while improving the delisting mechanism, should we also accelerate the establishment of a delisting compensation mechanism to protect the interests of small and medium-sized investors? Another example is whether the shorting of refinancing and lending bonds, which has been criticized by the market, should be restricted, so that the majority of small and medium-sized investors can get more fair and just investment opportunities? Wait a minute.

Will these questions be answered in the second half of the year? See.

To be sure, the performance of A-shares in the first half of the year is indeed unsatisfactory. Although there has been an exponential market for two or three months in the middle, the successive adjustments of the previous year, the unilateral downward trend since late May, and the normalized "4000+ to rise" situation still make most investors exhausted. Compared with the continuous record of overseas stock markets, the majority of shareholders can only be described as "angry and indisputable" for A-shares.

Having said that, when will A-shares stop falling and stabilize and start a new round of upward movement? In my opinion, July may be an important change node.

The reason is that, on the one hand, after more than a month of unilateral downward trend in A-shares, the current cost performance has been highlighted, and the recent national team has started a new round of large-scale bottom-copying and protection, such as CSI 300ETF and other varieties of frequent changes in volume is the best proof, reflecting that even if this position is not the bottom, it is no longer far from the bottom in the real sense.

On the other hand, there are two extremely important meetings to be held in July – the Third Plenum of the 20th Central Committee and the Politburo meeting. In particular, against the backdrop of the current complicated situation at home and abroad, these two conferences are bound to introduce extremely weighty policies and set the tone, and even have a direct bearing on the direction of the development of the national economy and society in the second half of the year and even in the next few years. For the capital market, once there is a guide to the policy direction, it is easy for all parties to reach a consensus and form a joint force, and the over-the-counter incremental funds are also expected to run into the market, which will then promote the reversal of the market.

Based on the above reasons, we can optimistically believe that the opportunities in this position far outweigh the risks, and the recent continuous adjustment of the market can just be regarded as a "gold pit" before the start of a new round of rally market, investors should cherish the opportunity to bend down to pick up gold, rather than just panic cutting meat or complaining, but let themselves fall into the darkness before dawn. In terms of allocation, we can focus on the direction of new quality productivity strongly supported by policies, as well as the sectors that report performance increases.

Of course, how far the medium and long-term market can go depends on the performance of economic data. Considering that the recent economic data is less than expected is one of the important factors suppressing market confidence, the continuous boost of market confidence still needs to be confirmed and supported by the warming of economic data. We might as well stay tuned.

"Realize the past without admonishment, and know that the future can be traced". July is coming, A-shares, please be kind to everyone.

(The author of this article is Fu Yifu, senior researcher of Xingtu Financial Research Institute)

The views expressed in this article are solely those of the author.