Continuous improvement in economic expectations, multiple overseas institutions bullish on A-shares
2023-09-25
In recent times, overseas institutions such as Goldman Sachs, JPMorgan Chase, ANZ Bank, and Lombard Consulting have raised their forecasts for China's economic growth and stock returns, leading to a more optimistic attitude towards the A-share market. At the same time, on the last trading day of last week, the A-share market saw a general upward trend, with market turnover rebounding and northbound funds turning towards net buying. For the subsequent market situation, institutions generally believe that considering factors such as policy implementation and the latest macroeconomic data, the market is expected to stabilize and rebound in the future. On September 22nd, the A-share market welcomed a general upward trend in the A-share index. As of the close of the day, the Shanghai Composite Index, Shenzhen Composite Index, and ChiNext Index rose 1.55%, 1.97%, and 2.32% respectively. On that day, more than 4600 individual stocks rose, with the A-share market trading volume exceeding 760 billion yuan. In fact, this was also the highest trading day since September 12th. From an industry perspective, among the Shenwanwan level industries, the communication, media, and computer industries ranked among the top performers, rising 4.53%, 4.48%, and 3.55% respectively. Multiple stocks in the communication sector rose their limit, while stocks such as Feiling Cosi achieved a 20% limit up. In addition, the non bank financial sector has strengthened, with the Shenwan level non bank financial industry index rising by more than 3%. It is worth noting that according to Wind data, on September 22, the net inflow of northbound funds was 7.493 billion yuan, ending the net outflow situation for three consecutive trading days. Among them, the net inflow of funds from Shanghai Stock Connect was 3.314 billion yuan, and the net inflow of funds from Shenzhen Stock Connect was 4.179 billion yuan. From the top ten active stocks on the 22nd Shanghai and Shenzhen Stock Connect, BYD, Industrial Fulian, and Celis ranked among the top in terms of net purchases of northbound funds. Since September, the A-share market has been in a volatile and declining trend. Except for the Shanghai Composite Index, which rose slightly by 0.40%, the other two major indices have had negative monthly fluctuations, and trading volume has continued to be low. Data shows that as of now, the highest daily transaction volume in September is only 888.131 billion yuan, less than 900 billion yuan, while the lowest transaction volume has dropped to below 600 billion yuan. It is basically certain that we are currently at the bottom of the market, and the reduction in transaction volume is also one of the characteristics of the bottom. "A person from Xingshi Investment told the Economic Reference Daily that on the one hand, the domestic economy is experiencing a marginal improvement. Although the market sentiment is weak, the response to the marginal improvement is weak. However, as the policy effect and economic improvement accumulate, quantitative changes will accumulate into qualitative changes, and the market may go out of the bottom. On the other hand, the stock market risk has been released under continuous adjustments. ERP data shows that the current cost-effectiveness of A-shares is good, and valuations of various sectors are also at lower levels since 2010. At present, China's economic fundamentals and stock price trends are diverging. With a series of policy support, some recent macro data has shown signs of bottoming out. The divergence between the current fundamentals and stock price performance may be caused by low sentiment and will take time to reverse; however, analysis shows that based on certain indicators, the market may have already bottomed out Wang Zonghao, head of China equity strategy research at UBS, said in the recently released China equity strategy that he proposed several signs of market bottoming, such as monthly foreign capital outflow, RMB exchange rate and 10-year treasury bond bond yield
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：Economic Information Daily
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