According to wind data, at the end of January 2, there were just 100 stocks in the A-share market, including 14 st stocks, giving investors the first red envelope in 2020. Specifically, most of the 100 trading stocks come from manufacturing and communication information industry, 60% of which come from manufacturing industry, 22% from communication software industry, accounting for more than 80% of the total, and the rest come from leasing and business services, entertainment, real estate and other sectors respectively.
On the first trading day of the resumption of trading, Zhao Wei, chief market analyst of Founder Securities, said that the opening up on the first trading day of the new year is a good omen for the A-share market, which is conducive to encouraging market confidence and also indicates the market situation of the whole year. The red market of the whole year is an event of approximate rate. Whether the total trading volume of the two cities can stand at 700 billion for three consecutive trading days, and whether the gap left by two consecutive trading days can be filled back, will determine whether the market can walk out of the trend to the next step.
Benefiting from the reduction of central banks reserve and release of liquidity, the stock market opened higher and higher in the beginning of the year, and the growth of media, electronics and other growth industries increased the most all day. The completion chain (building materials, home furnishings, home appliances) and new energy industry chain recommended by us in the early stage performed well. According to the analysis of Huang Fusheng, President of Pacific Securities Research Institute, the central bank is expected to continue to take care of liquidity through open market operation / reduction of interest rates and other tools, providing a good environment for supply side reform, three major battles and the completion of the year of building a moderately prosperous society in an all-round way. In the short term, we are optimistic about financial / cycle stocks, and in the style, we are more optimistic about blue chip. In the medium and long term, we continue to be optimistic about the growth leader of semiconductors and 5g applications that benefit from 5g and bring Pengbai power.
Spring market is on?
Under the consensus expectation of the market, the central bank announced a 0.5 percentage point reduction on New Years day, releasing more than 800 billion yuan of long-term funds. Guo Lei, chief Macro Analyst of GF Securities, believes that the overall reduction is in line with expectations. After the implementation of the reduction, the trend of economic stability will be further consolidated. Nominal growth and corporate profit recovery will become one of the basic clues. Equity assets are still in a pricing environment where all elements are friendly, and the reduction will help maintain risk appetite.
Specifically speaking, Guo Lei believes that the implementation of this reduction will, on the one hand, coordinate with the issuance of local bonds at the beginning of the year, clarify the combination of stable currency and broad finance; on the other hand, it will help banks to support the investment and financing needs of enterprises in the current recovery. This will further consolidate the trend of economic stability; third, this years operation has certain signal significance, which will further promote local governments to actively stabilize growth. In addition, under the background of fixed asset investment restoration, manufacturing industry replenishment of inventory, nominal growth and bottom recovery of corporate profits in 2020, the short-term certainty of economic cycle will be higher than the trend, and asset performance will show a more balanced feature.
With the policy and fundamentals gradually clear, the spring market and bull market is slowly rising. Facing the continuous increase of the market index since November 2019, Xun Yugen, chief strategist of Haitong Securities, believes that the year-on-year recovery of corporate profits and asset allocation bias to the stock market will make the spring market turn into a bull market. In the spring market stage, banks with low value and high dividend, real estate and flexible securities companies are dominant. In view of the whole year next year, technology and securities companies with faster profit growth are better.
Return of expected valuation of institutions
The current A-share high valuation and undervalued extreme differentiation. In the view of Qin Peijing, chief strategic analyst of CITIC Securities, the current technology main line valuation may be higher than that of the corresponding leading companies in the US, while the weight index has a higher price performance ratio than the S & P 500. Since December, foreign investors have massively added undervalued banks, home appliances and other industries, and it is expected that the preview of well-off bull market before the festival will continue. However, he also said that the potential external and performance risks may start to appear in late January, and the heat will gradually weaken. It is expected that the market will continue to change its style, that the undervalued value will relay the growth of high valuation, and that it will continue to recommend the varieties that are undervalued and benefit from the economic expectation to stabilize.
Wang Delun, chief strategist of Societe Generale Securities, also favors the opportunity for the return of undervalued value. He believes that China has a large number of undervalued, high dividend, and even very cheap assets globally, which will usher in revaluation. These assets are largely focused on cyclical stocks and financial real estate. However, he also said that it is not necessary to worry about the overvaluation of 5g, consumer electronics and other technology sectors. The next phase of 5gs main line, facing the performance verification period, is an important opportunity for investors to survive the fittest and carefully select the real big innovation technology stocks. The new energy vehicle chain will probably become the resonance point of domestic and foreign investment in 2020, and the relevant industry chain targets are worth focusing on.
In contrast, although both are optimistic about the valuation return opportunities of undervalued sectors, the views of the buyers institutions seem to be more cautious. Li Quansheng, managing director of Boshi fund and general manager of stock investment department, judged that in 2020, a market is likely to enter the stage of fluctuation convergence, and there should be a relatively reasonable expectation for A-share valuation and performance driven growth in the next year. It is expected that in 2020, active institutional customers such as public funds and foreign investment will still have the demand for key allocation in the core areas of consumption, science and technology, medicine, etc., so structural adjustment and band switching can avoid the existing valuation pressure. However, stable institutional funds such as insurance companies and bank financing subsidiaries may increase allocation in the direction of high dividend, undervalued value and low volatility.
Dacheng Fund said that in the long cycle, the real economy will still be in the adjustment stage in 2020, and the combination of economic shift environment + low interest rate + reasonable valuation will change, but it will still be the core factor determining the A-share market. It is expected that the recovery of undervalued Pro cyclical varieties should be focused on in a strong economic resilience, and the long-term high-quality leading stocks of science and technology, consumption and advanced manufacturing industries in line with the future development direction should be selected in a balanced market environment.