The capital market is expected to attract more "long money"
2023-12-13
Since the beginning of this year, China's economy has rebounded and made solid progress in high-quality development. However, currently, with the overlapping of cyclical and structural contradictions in China, and an increasing number of unfavorable factors in the international political and economic environment, China's development is facing a complex and complex situation. Recently, the 2024 annual strategy meetings of securities firms have been held intensively. How do institutions view the investment market in 2024? Market confidence needs to be strengthened. "The capital market drives the whole body, reflecting expectations and confidence." Yang Minghui, General Manager of CITIC Securities, said that currently, some investors in the A-share market have a pessimistic understanding of issues such as geopolitical situation, macroeconomics, policy implementation, and industrial upgrading. Looking ahead to 2024, China's economy will adhere to the path of high-quality and sustainable development, and strong policy deployments will reverse social expectations and stimulate economic vitality. Liu Jian, Secretary and Chairman of the Party Committee of Shenwan Hongyuan Group and Securities Company, believes that since the Politburo meeting of the Central Committee of the Communist Party of China proposed to "activate the capital market" on July 24 this year, a series of supportive policies have been launched and implemented, and various measures such as investment, financing, and trading have been taken simultaneously, introducing a source of fresh water to better shape the new ecology of the capital market. CITIC Securities believes that looking ahead to 2024, market confidence will be boosted. The revival of domestic economic vitality and the steady recovery of A-share profit cycle are the fundamental basis for the resurgence of confidence. It is expected that the domestic macroeconomy will steadily recover and regain vitality in 2024. The end of the US dollar interest rate hike cycle and the opening of domestic monetary policy space are catalytic factors for the resurgence of confidence. The investment side reform represented by the introduction of long-term funds is a institutional guarantee for the reunion of confidence. Institutions expect that capital market policies will continue to stabilize market liquidity expectations in 2024, and capital market reforms are expected to shift from financing oriented to investment oriented reforms that prioritize investor experience. The action plan for capital market investment oriented reforms is gradually approaching. Experts say that one of the highlights of the plan is to increase the introduction of medium and long-term funds, including optimizing accounting treatment, establishing a long-term assessment mechanism, and expanding the coverage of the second and third pillars of elderly care through tax incentives; The second highlight is to continue promoting the optimization of the structure of public funds, with a focus on developing passive investment products such as ETFs. Incremental funds can be expected to be an important factor in promoting the recovery of the A-share market. Looking ahead to 2024, several institutions have indicated that domestic liquidity may remain loose next year, while overseas liquidity will enter a turning point, and the equity market is expected to attract more medium - and long-term funds. CITIC Securities believes that changes in the behavior of four types of investors in 2024 will bring incremental funds to the market, with long-term allocation funds being the main force. Change 1: Actively raising public funds to increase the allocation of low recovery sectors, and ETFs taking on incremental funds entering the market. Change two, subjective bullish private equity has a large space for additional positions, and quantitative private equity regulation continues to be optimized. According to a survey of CITIC Securities channels, the active private equity positions of small and medium-sized enterprises have continued to decline from a peak of around 82% in April this year to 65% in mid September, and have remained below 70% as of the end of October. Active institutional funds have been keeping a wait-and-see attitude, and as confidence in the A-share market gradually recovers and pessimism reverses, there is significant room for such funds to increase their holdings in 2024. Change three: Trading oriented foreign investment margin shifting towards positive, allocation oriented
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：economic daily
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