Trend of A-share in the period of SARS recovery: the current round of callback or shorter cycle

category:Finance
 Trend of A-share in the period of SARS recovery: the current round of callback or shorter cycle


Finally, disputes need to wait for the test of practice. But more market views agree that the inflection point of this round of A-share adjustment will appear at the stage high of new cases; when the new cases decrease or the growth rate slows down and other improvements, the market is expected to enter the repair period. A number of securities analysts expect the turning point to be in mid February, and a shares are expected to be restrained before rising this month.

Dispute: can the historical trend be reproduced?

In the recent two days research reports, the more common analysis framework is to analyze the trend of A-share in the SARS epidemic period in 2003 in stages, at the same time, compare the current epidemic development stage with it, and then determine the stage to which of A-share through the historical trend.

For example, Dai Kang, a strategist at GF Securities, said that the impact of SARS risk preference on A-share market presents three stages. The first case occurred in November 2002 to the cognitive period in mid April 2003, the panic period from mid April to early May 2003, and the digestion period from mid May to late June 2003.

In the panic period of that year, the Shanghai Composite Index fell 8.8% in eight trading days. With the decrease of newly confirmed cases, a shares gradually changed from panic to digestion, and the Shanghai Composite Index fell only 1% during the digestion period. The information concentration of the 2020 Spring Festival holiday has been the fast forward version from March to April 2003. The current short-term performance of the stock market after the opening can be focused on the indexs decline of 9% in 8 trading days in late April 2003. Dai Kang said.

Wang Yang, an analyst at Soochow securities, also divided the trend of a shares in the SARS period into three segments. Among them, in late April 2003, suspected case reports peaked and began to decline, which was the turning point, and A-share began to show emotional repair. In its view, the number of cases in the current pneumonia epidemic, especially the change of new suspected cases on a month on month basis, will be the core variable affecting the market rhythm in the short term. That is, if the number of suspected cases peaked, the A-share rate will usher in a turning point. But judging from the performance of a shares on January 23, the market is still in a panic period and will continue in the next 1 to 2 weeks.

Can we effectively predict the future of a shares by analogy with historical trend? Some analysts have a clear opposition to this.

The short-term impact of the epidemic on Chinas economy is great, and the medium and long-term impact cannot be ignored. At present, many studies compare the epidemic with SARS in 2003, but they think that the comparability is not strong, and the current macro environment is completely opposite to that at that time. Liang Zhonghua, an analyst at Zhongtai securities, said that when SARS broke out in 2003, Chinas macro-economy was at the starting point of a strong recovery. At that time, the economy was in an upward channel, which was quite different from the current situation.

Liang Zhonghua also said that the profit growth rate of industrial enterprises in 2003 was as high as 43%, while that in 2019 was a negative growth rate of about 2%; currently, the proportion of service industry was significantly higher than that in 2003, the leverage ratio of various departments was also at a high level, and the risks in the real estate and financial system were not the same. The environment of the two periods is different. Even in the face of the same impact, the economic and expected impact will certainly be different. The reference significance of the analysis of the impact of SARS on the current epidemic situation in 2003 is not significant.

Even after reviewing and comparing the trend of SARS, Dai Kang also pointed out that the impact of the current epidemic on the capital market cannot be simply reproduced throughout 2003.

Dai Kang also further summarized the background differences between the two epidemic periods, focusing on the fact that the current global economic fundamentals are not as optimistic as 2003, and the contribution of the tertiary industry in the current economy is more than 2003; in addition, the current restrictions on traffic and interaction are more stringent, the situation of delaying the resumption of work during the Spring Festival is more severe, and the impact of industrial, commercial and trade activities may be more serious than 2003 Serious. But it also points out that the market can still draw lessons from the SARS period in 2003 in terms of the expectation of counter cyclical policy, the benefit and damage of the industrial sector.

Consensus: shorter adjustment cycle and unchanged long-term trend

Whether we can learn from the trend of the SARS epidemic period is still uncertain. However, the market view generally agrees that the impact of the epidemic is still limited to the short term, and the adjustment cycle affected by the epidemic may be shorter; the logic and trend of a share in the medium and long term will not change, and the growing new economic assets will be safer.

Dai Kang said that the long holiday period can be compared to the panic period in late April 2003. But because the public opinion supervision and information transparency of the epidemic is better than that of SARS, the panic period will be shorter than that of SARS for eight consecutive trading days. In terms of range, A-share fell by 3.2% before the festival, FTSE China A50 Index fell by 7.4% during the Spring Festival, and a / h market index generally fell by 9-12% in 2003. Based on the above indicators, it is expected that the index will have 5-7% adjustment pressure after the opening.

Dai also pointed out that the downward turning point of new cases is an important watershed for the market to stabilize and rebound during the SARS period in 2003. By analogy, this years Spring Festival rework peak case change is worth tracking. It is expected that the market will enter a rapid adjustment after the opening of the market. At this time, the fund will look for a safe haven. The sectors benefiting from the market include medicine, games, finance with low value and high dividend, etc.; when the turning point of the decline in the number of new cases comes, the leisure services, retail, TMT that oversold in the early stage may usher in a staged recovery and repair. When the impact of the epidemic subsides gradually, the growth of science and technology will return again. New energy vehicles, consumer electronics and games can be concerned.

The more optimistic view also believes that the low opening after the festival can basically fulfill the markets concerns, and the first wave of impact of the epidemic on a shares will soon be digested.

Fan Jituo also pointed out that the impact of the epidemic on the market also needs to consider the substantial impact on the real economy, whether the epidemic will worsen, whether there is a second wave of shocks, and the observation node is mainly in the middle of February. However, it stressed that the overall risk premium of A-share in 2003 was low, and the stock market itself was expensive and cost-effective. From a longer-term perspective, the current valuation center of A-share is far better than that in 2003, and the trend of continuous improvement in the profitability of various industries is far from over. This epidemic probably wont change the logic of the index centers rise in 2020.. Although he does not agree with the trend analogy of SARS in 2003, Liang Zhonghua also said that from the perspective of asset allocation, there is adjustment pressure on the equity market in the short term, but in the longer term, waiting for a certain turning point of the epidemic, the logic of liquidity easing will continue, and he is optimistic about new economic assets in the long term. The cycle is still facing short-term earnings decline and long-term pessimistic expectations, Im afraid its hard to have a good performance; the consumption is overvalued, and it needs to be adjusted to see opportunities. Source: the first financial editor: Liu Songpeng nbj9949

Fan Jituo also pointed out that the impact of the epidemic on the market also needs to consider the substantial impact on the real economy, whether the epidemic will worsen, whether there is a second wave of shocks, and the observation node is mainly in the middle of February. However, it stressed that the overall risk premium of A-share in 2003 was low, and the stock market itself was expensive and cost-effective. From a longer-term perspective, the current valuation center of A-share is far better than that in 2003, and the trend of continuous improvement in the profitability of various industries is far from over. This epidemic probably wont change the logic of the index centers rise in 2020..

Although he does not agree with the trend analogy of SARS in 2003, Liang Zhonghua also said that from the perspective of asset allocation, there is adjustment pressure on the equity market in the short term, but in the longer term, waiting for a certain turning point of the epidemic, the logic of liquidity easing will continue, and he is optimistic about new economic assets in the long term. The cycle is still facing short-term earnings decline and long-term pessimistic expectations, Im afraid its hard to have a good performance; the consumption is overvalued, and it needs to be adjusted to see opportunities.