Editor's note: What is the survival situation of various industries when the price rises are rising; how to seek survival and development in industries after the continuous impact of the epidemic; how to break through in a market where resources continue to be concentrated; stand on the cusp of drastic changes in macro policies , What new changes are taking place in China’s industry? Through the double observation of the macro and the micro, we have produced the topic of this issue to find the answer.
Economic Observer reporter Li Qin "Recently, while controlling fund positions, we have reduced the allocation of some midstream industries that have been damaged by rising costs, focusing on new energy power operators and new energy. High-quality companies in the fields of automobiles and fine chemicals.” said a fund manager in Shanghai.
Recently, market changes and volatility have forced fund managers to adjust their allocation priorities and replace individual stocks. From the failure of "drinking and taking medicine" to the new energy surpassing the dust, to the rising coal market and the return to high levels of liquor...Since September, the performance of the A-share and Hong Kong stock markets has not been satisfactory. The change has the meaning of "squandering flowers gradually becoming charming."
Many institutions have interpreted the reasons for market fluctuations from overseas and domestic. At the same time, in response to the trend of the A-share and Hong Kong stock markets in the fourth quarter, fund managers said that in the future, the A-share and Hong Kong stock markets will continue to maintain the structural market unchanged. On the whole, the economy is suboptimal or the economy has reached an inflection point and valuation Relatively reasonable sections deserve attention and layout.
Some fund managers said frankly that under the above background, they will pay more attention to the study of company fundamentals, and strive to find high-quality companies with good fundamentals and superior cost-effectiveness in the market.
The volatile market
The A-share market has experienced a roller coaster. Since September (as of September 29), the Shanghai Composite Index has risen all the way from around 3,500 points, rushing to a high of 3,715.37 points, followed by shocks, and always hovering around 3,600 points. At the same time, the Shenzhen Component Index climbed from around 14300 points to 14771.87 points and then showed a downward trend, and finally stopped at around 14300 points.
At the same time,The performance of the Hong Kong stock market tends to open up and down. In early September, the Hang Seng Index remained at a position of more than 26,000 points despite fluctuations, and then fell all the way down from more than 25,000 points to about 24,000 points. The Hang Seng Technology Index continued its weakness for only a few months, rising from about 6,700 points at the beginning of the month to 6,800 points. After reaching a high of 6887.94 points, it fell in a broad range. The decline once expanded to 4.52%. It is currently closed at around 6,100 points.
From the perspective of capital flow, the total inflow of northbound capital in September was 29.549 billion yuan, of which 17.922 billion yuan was for Shanghai Stock Connect and 11.627 billion for Shenzhen Stock Connect. The total inflow of southbound funds was 18.062 billion Hong Kong dollars, Shanghai Stock Connect was -8.935 billion Hong Kong dollars, and Shenzhen-Hong Kong Stock Connect was 26.997 billion Hong Kong dollars (as of September 28). In terms of capital flow, the main inflows and main outflows of SW power equipment, SW non-ferrous metals, and SW basic chemicals in Shenwan's first-tier industries are all in the forefront.
Generally speaking, industry professionals generally believe that the two major markets have performed poorly since September. The reason can be analyzed from both overseas and domestic levels.
Overseas, Hongshang Assets Chief Investment Officer and partner Xu Dong believes that in September, overseas market expectations of the U.S. Federal Reserve's balance sheet began to heat up, and overseas liquidity tightening expectations have a negative impact on the Hong Kong stock market. The TEDA Manulife Fund further added that the market’s subsequent reduction of the Fed’s interest rate meeting meeting to reduce the specific operation of debt purchases, the delay in the US debt ceiling to further increase the possibility of technical defaults, and the political geo-risks of France, the United States and Australia have all intensified these uncertainties. With the volatility of the external markets, European and American stock markets have emerged from the general decline in the past week, and the volatility index VIX index has risen significantly.
Domestically, TEDA Manulife Fund stated that the recent market adjustments mainly come from the weakening of internal economic indicators and the increasing uncertainty of external events. With the weakening of investment, consumption and other indicators in September, the market’s forecasts for GDP growth in the third and fourth quarters have fallen. At the same time, due to the high price of raw materials, the earnings forecasts of some individual stocks have been revised downwards, indicating that corporate earnings, especially midstream manufacturing There are signs of weakness.
In addition, Xu Dong believes that the liquidity of the A-share market has remained at a healthy level, and the daily turnover has exceeded one trillion for more than 40 consecutive trading days. On the one hand, active transactions indicate that funds continue to enter the A-share market.It supports the long-term performance of the A-share market. Since September, the power, public utilities, coal, petroleum and petrochemical sectors have seen significant gains, significantly outperforming the growth sectors. This structural differentiation has been affected by factors such as restrictions on the production capacity of high-energy-consuming industries and the introduction of green power policies in many places since September due to the dual control of energy consumption.
In the Hong Kong stock market, Starstone Investment Chief Research Officer Official Lei and Xu Dong both said that the impact of the debt crisis of some real estate companies, combined with rumors that the Hong Kong real estate market will change, will have a greater impact on the stock prices of Hong Kong real estate companies. In addition, Macau’s revision of the "Casino Lucky Gaming Operating Legal System" was publicly consulted on September 15, triggering a sharp drop in gaming Hong Kong stocks.
Where to go in the fourth quarter?
What are the characteristics of the A-share and Hong Kong stock markets in the fourth quarter? Many institutions believe that the structural quotations of the A-share and Hong Kong stock markets remained unchanged in the fourth quarter.
The judgment is also based on the overseas and domestic levels.
From an overseas perspective, Xu Dong and Fang Lei both stated that during the Fed's meeting on interest rates in September, the Fed lowered the US economic growth rate this year from 7% to 5.9%, and the core PCE inflation year-on-year growth rate from 3%. % Increased to 3.7%. Fed President Powell expressed his view that the balance sheet reduction will be announced in November this year. It is basically in line with market expectations, and the subsequent impact on the market may gradually weaken.
From the domestic perspective, first of all, Xu Dong believes that 2021 is an important year for the global green transformation. With the economic recovery after the epidemic, the global demand for cleaner natural gas has skyrocketed, and natural gas prices in the United States and Europe hit record levels. Over the years, it has even reached a record high. China's dual control of energy consumption and restrictions on high energy-consuming capacity have also pushed up the prices of various upstream raw materials to a certain extent.
Secondly, Evergrande’s breach of contract has received full attention from Chinese supervision. Xu Dong said that the risk of evolving into the Chinese version of "Lehman Moment" is not high, but the Evergrande incident will still increase the cost and difficulty of subsequent real estate industry financing, and will have a certain negative impact on real estate investment, thereby dragging China and even the world. Economic growth (according to the forecast of the International Monetary Fund, China will contribute 1/4 to global economic growth in the next few years). Fang Lei also believes that there is a high probability that some real estate companies will have a clear solution to the debt problem.There is a high probability that it will not have a huge impact on the domestic market. The influence of the above factors may gradually weaken in the future.
At the same time, based on the consideration of these two major factors, many institutions believe that the global market in the fourth quarter is dominated by shocks to prepare for the subsequent upward movement, while the structural market of A shares and Hong Kong stocks continues. It is worth noting that the decline in the profitability of listed companies is detrimental to the stock price, but the macro policy will remain active. The monetary policy remains moderately loose, and the fiscal policy is relatively clear, which will become an important support for the market.
A private equity fund manager in Beijing said that in the management of funds, he will pay more attention to the study of company fundamentals, and focus on trying to find high-quality companies with good fundamentals and superior cost-effectiveness in the market. The return on stock investment essentially depends on the performance growth of listed companies. Therefore, firmly grasp the company's own fundamentals, analyze the company's intrinsic value, and refrain from chasing short-term hot spots. On the basis of good fundamentals, we also need to pay attention to the reasonableness of valuation. Investing in assets whose valuation is within a reasonable range can obtain a better return-to-risk ratio and long-term excess return.
In terms of investment opportunities, Fang Lei believes that it is possible to focus on sectors with suboptimal or inflection points and relatively reasonable valuations. Some sectors have entered a situation where the odds are higher and the winning rate is gradually improving. In the long run, there may be good excess returns.
Xu Dong said that the strict implementation of China's dual energy consumption control has allowed investors to see the confidence of supervision in China's green development in the field of sustainable green development. Many sub-sectors, such as new energy vehicles, new energy power operators, etc., have the potential for high-quality and sustainable growth. From another perspective, strict energy consumption control helps clear outdated and excess capacity in many industries, and many high-quality companies in the fine chemical industry will also benefit from it.
In addition, TEDA Manulife Fund reminded that investors should continue to choose stocks based on the two dimensions of matching prosperity and valuation profit. Under the background of weaker overall profitability, industries and companies that can achieve higher growth rates will appear scarce, and market funds will set prices. However, it needs to be emphasized that even in a high-prosperity track, its valuation will not rise without an upper limit. When the valuation already implies optimistic growth expectations for a long time in the future, the momentum for continued rise may weaken. Therefore, for the valuation Profitable matching cannot be ignored either.
Bosera Fund mentioned in the fourth quarter investment strategy meeting,Standing at the current node, investors should plan for the long-term. Because the short-term market is disturbed, but no matter how it changes, the most certain and sustainable policy still lies in the unwavering long-term support for high-end manufacturing, domestic substitution, new energy, and green industries. This is the basis for long-term deployment. .
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