Since 2019, the structural market of a shares has been fully developed. In the market, there is also such a story: investors swing between dregs and warm men. Only drunkard is the company forever. The so-called slag mens shares refer to those sectors which have experienced a sharp fall, such as science and technology and new energy vehicles; the warm mens stock index, which has long-term outstanding performance in medicine and consumption, is able to cross the bull and bear sectors; Jiugui is the liquor sector led by Guizhou Maotai and Wuliangye.
At a time when the U.S. general election falls and vaccine research and development has made breakthroughs, the global economy will move towards a resonant recovery next year. Under the changes of macroeconomic environment and liquidity, what is the best option for A-share next year? At the end of the year, various securities companies and international investment banks have published 2021 macroeconomic and strategic prospects.
An institutional investor is recently allocating more money to warm men stocks. The logic behind this is that, with the gradual recovery of the economy, institutional investors will give priority to the growth of earnings per share (EPS). At the same time, liquidity is not loose, and overvalued stocks will face adjustment. The global political and economic uncertainty is declining, and the market rate will probably turn to warm men. However, the hope of innovation and transformation is still pinned on the scum man, so we should select the slag man. As institutional funds, they will consider EPS and PE (price earnings ratio) comprehensively, switching between technology stocks and value stocks. The consumer sector has no other shortcomings except expensive, so there will always be a bottom position allocation.
Wang Hanfeng, chief strategy officer of CICC, told the economic observer that there is a big difference between the allocation of major assets next year and that of this year. The impact of the epidemic in 2021 will be gradually drifting away, which also means that growth recovery and policy exit will advance and retreat. Therefore, the index level is difficult to have a big market, and there may be a wave of market from now to the first quarter or the first half of the year. Next year, according to the impact of the epidemic, growth and policy rhythm, it is crucial to grasp the phased and structural opportunities.
Although the macro-economy is getting better, the A-share strategy in 2021 may be balanced: choose new and old allocation?
The macro economy is getting better
With the low base number superimposed on the economic recovery expectation, various institutions generally have higher expectations for Chinas economic growth next year.
Peng Wensheng, chief economist of CICC, said that the epidemic situation will continue to ease in 2021, and demand will accelerate to catch up with supply under the multiplier effect. The impact of the epidemic is different in different industries, and the differentiation of industry profits and employee income is obvious. The multiplier of demand expansion may be less than the multiplier of decline in the stage of epidemic shock, because the gap between the rich and the poor is aggravated.
Liquidity tightening has also become the consensus of various institutions. Since the second quarter, the interest rate and the monetary policy of China have been stable since the second quarter. Xing Ziqiang said that the tightening of monetary policy in the future may be implemented as early as the first quarter of 2021 by slowing down credit growth and reducing the issuance of local government special bonds.
Peng Wensheng believes that from the perspective of the financial cycle, there may be tight credit momentum. From the perspective of capital supply, many credit expansion in 2020 will be used to make up for the shortage of operating cash flow, rather than productive investment. In 2021, the burden of enterprise debt service will rise, or there will be endogenous tight credit. In 2020, the motivation of investment house purchase will rise, and the expansion of credit, combined with the factors of widening the income distribution gap due to the epidemic situation, will further push up house prices and extend the financial cycle. However, the real estate price has been at a historical high, coupled with the tight credit conditions, there may be adjustment pressure in the financial cycle in 2021, especially in the second half of the year, which is not conducive to the expansion of demand. Tight credit calls for loose money. In view of the drawbacks of prolonged financial cycle caused by the epidemic situation through credit expansion in 2020, fiscal policy in 2021 still needs to be strengthened.
In terms of asset allocation, Jingshun expects that the industry rotation in the stock market will benefit the traditional cyclical industries, which will benefit from the gradual restart of face-to-face industries, valuation attraction and the rise of bond yields; in terms of fixed income, sustained economic expansion, positive fundamentals and loose policies will continue to generate favorable credit conditions in the next year, although the yield may be Will be subject to the continued narrowing of interest rates. Growth and risk categories are expected to continue to outperform the market in a number of macroeconomic scenarios.
UBS pointed out in its 2021 annual outlook report the year of Renaissance and the investment in Asia Pacific outlook 2021 - layout for Asias Renaissance published on November 20, that investors should consider expanding the scope of their investment portfolio, no longer limited to large US enterprises, low yield bonds and US dollars. UBS expects some of the stocks that underperform in 2020 to have the biggest upside in 2021, especially cyclical stocks and medium-sized stocks.
UBS is bullish on Asian stocks (excluding Japan) and high-yield bonds, and from a tactical perspective, it is optimistic about Asias cyclical technology stocks and supplementary stocks. If investors want to capture the next golden opportunity, they should start from financial technology, green technology, medical technology or 5g.
In terms of asset category, compared with treasury bonds and cash, DMC preferred risk assets such as stocks and bonds, and believed that the valuation of risk assets was still within a reasonable range. Andrew sheets, chief cross asset strategist of Morgan Stanley, said at a media conference on the 18th that global investors have the same optimistic expectation for the market next year, and the focus of divergence is whether emerging markets or developed countries will perform better, and there are also differences on the level of global inflation next year.
It has become the consensus of overseas institutional investors that RMB should go up the appreciation channel. Xing Ziqiang predicts that the RMB exchange rate is expected to be 6.4 by the end of 2021, and China may relax the two-way flow of capital to resist the pressure of RMB appreciation.
According to Wang Hanfeng, structural opportunities will dominate next year. Gold is a big year this year, but with more confidence in global economic growth, gold may not perform as well next year. Under the expectation of economic recovery and rising inflation, global bonds may not perform as well as this year. Chinas stock market is a structural opportunity.
CICC expects A-share earnings to grow by 15-20% in 2021. At present, the forward P / E ratio of CSI 300 is 12.6 times, and the P / B ratio is 1.3 times, which are close to the historical average value. The implied risk premium level is in the middle and low level in recent years, and there is a certain expectation for the growth recovery.
For 2021, Li Xunlei also believes that the market will face a mean return next year. The median performance return of public funds in 2019 and 2020 is more than 30%. Such a high return is unsustainable in the long run. Therefore, I am afraid that the fall in yield in 2021 is inevitable. In terms of investment opportunities, Im afraid that we cant follow the current mode of selecting a good track. In the future, excellent enterprises and leading enterprises should be selected for a good track. At the market level, we should choose those good enterprises that are relatively undervalued. For example, the overall valuation of Hong Kong H-shares has not been relatively improved in the past two years, and the discount rate has expanded in the context of the Hong Kong stock connect. Therefore, there may be more opportunities for average return in 2021.
In terms of specific industry allocation, Jonathan Garner, chief stock strategist of Damascus Asia and emerging markets, said that Chinas stock market was allocated low in energy and finance, and high in new economy sectors, including the Internet, media, optional consumption and health care, while real estate was rationed low for policy reasons. Given the sharp rise in Chinas stock market this year, Jonathan believes that next years performance may not be as good as this years. According to CITIC Securities Strategy Research Report, the slow rise of a shares in 2021 will go through three stages, namely, the slow rise period, the quiet period and the resonance upward period. First of all, the European and American economies are recovering slowly, and the Sino US game tends to moderate. Secondly, A-share profits clearly improved, opening the industry rotation space. Thirdly, monetary and fiscal return to normal, planning the implementation of catalytic theme. Finally, external liquidity is still loose, while domestic liquidity is generally stable. It is expected that the A shares will attract a net inflow of about 700 billion yuan next year. Based on the above judgment, CITIC Securities expects A-share to experience a trilogy of slow rise next year. Source: Economic Observer, author: Zheng Yizhen, editor in charge: Zhong Qiming_ NF5619
In terms of specific industry allocation, Jonathan Garner, chief stock strategist of Damascus Asia and emerging markets, said that Chinas stock market was allocated low in energy and finance, and high in new economy sectors, including the Internet, media, optional consumption and health care, while real estate was rationed low for policy reasons. Given the sharp rise in Chinas stock market this year, Jonathan believes that next years performance may not be as good as this years.