. The current market sentiment level can be observed from three levels: market capital sentiment, listed company behavior and public opinion environment. The emergence of the "freezing point" of market sentiment is mostly a prerequisite for the market to bottom out.
. In terms of the behavior of listed companies, the market bottoming out in the past was often accompanied by the rapid decline in the reduction of industrial capital holdings and the recovery of corporate repurchases. Although the net reduction of industrial capital has declined significantly in recent times, the repurchases of listed companies are still at a low level, and there has not been a situation where high performance has been released in March this year.
. At the level of public opinion environment, negative news in the market bottoming out stage often brings stage negative feedback , such as the white horse stock 's make up for the decline, and at the low point of sentiment, it is often guided by positive public opinion.
. Overall, the overall sentiment of A shares has dropped to the low point since 2021. The opportunity for improvement comes from the slow release of external suppression factors, such as the USD index ended to rise rapidly; on the other hand, it also requires the repair of confidence. It can be observed from the behavior of listed companies and the public opinion environment to maintain the judgment that the value sector will be in the phase of the bottoming process.
Summary
. In terms of market capital sentiment, the current trading volume and turnover rate have reached the low point since 2021, but it is still a certain distance from the market bottom in 2018; stocks are in a relatively good mood, and the number of new lows is significantly lower than the level at the end of April this year. From the perspective of trading volume and trading volume indicators, the trading volume and trading volume of Wande All A since 2021 are around 60 billion shares and 600 billion yuan respectively. It has reached this freezing point, but it is still a certain distance from the market bottom in 2018. Judging from the turnover rate, the current trading sentiment has also reached a low level within 2 years, but due to the National Day holiday, the turnover rate before the holiday is still likely to decline. It is worth noting that individual stocks are currently in a relatively good mood. In terms of the number of targets that hit a new low in half a year, they have not yet broken through the freezing point in April this year.
. In terms of the behavior of listed companies, the bottoming out of the market in the past is often accompanied by the rapid decline in industrial capital share reduction and the recovery of corporate repurchase. Although the net reduction of industrial capital has declined significantly in recent days, the repurchase of listed companies is still at a low level, and there has not been a situation where high performance has been released in March this year. According to the performance of the five rounds of market bottoming out and rebounding in December 2018, August 2019, March 2020, March 2021 and April 2022, the amount of stock repurchase is mostly rebounding before the market bottoms out, and the scale of net reduction in industrial capital often shrinks rapidly before and after the market bottoms out. In the past month, the total repurchase amount of A-share listed companies has been only 520 million yuan, which is at a low level. Although the scale of net reduction in industrial capital has gradually declined, it has not yet reached the stage of rapid shrinking volume. Referring to historical experience, the current pessimism of listed companies may still be in the fermentation stage. In addition, the market sentiment freezing point in the past few rounds was accompanied by the phenomenon of listed companies releasing positive news in a concentrated manner. At this stage, there has not been a situation similar to the situation where high-performance performance was released in March this year.
and public opinion environment, negative news often brings phased negative feedback during the market bottoming stage, such as the rebound of blue-chip stocks, and at the low point of sentiment, it is often guided by positive public opinion. Looking back on the period of market sentiment in recent years, fragile market sentiment often amplifies the impact of individual disturbing events. For example, in July 2019, October 2020 and April 2021, there were all "killing white horses" in turn, but after the pessimism was released quickly, the market will mostly reach the bottom. At the same time, when market sentiment fell to freezing point in the past, it was often guided by positive public opinion. Recently, the "blue horse stocks" in securities companies, medical beauty , semiconductor and other industries have successively fallen . The impact of this round of negative news on the market has continued to ferment.
. Overall, the overall sentiment of A-shares has dropped to the low point since 2021. The opportunity for improvement comes from the slow release of external suppression factors, such as the US dollar index ends to rise rapidly; on the other hand, it also requires the repair of confidence. It can be observed from the behavior of listed companies and the public opinion environment to maintain the judgment that the value sector will be in the phase of the bottoming process. 's current full A valuation level has fallen to its low level in the past five years, and the market allocation value is gradually emerging.In the short term, in the environment of sluggish risk appetite, the market will still be in a process of style rebalancing, and the value sectors with defensive attributes will have a phased advantage, including the post-completed real estate industry, as well as high-quality leading real estate stocks and banks. In the medium and long term, under the background of economic structural adjustment and "destroying the old and establishing the new", small and medium-sized growth is an opportunity to make arrangements after the pullback, focusing on investment opportunities in new energy industries and hard-core technology, independent and controllable fields.
Risk warning: liquidity tightens beyond expectations, the economy stalls downward, Sino-US frictions intensify, the epidemic worsens beyond expectations, historical data is for reference only, uncertainty in the target company's future performance, etc.
,? Whether the current sentiment has reached freezing point
Under the influence of factors such as disturbances in geopolitical events, the renewed increase in the expectation of tightening of the Federal Reserve on Feder , and the continued weakness of domestic economic growth, the A-share market has been more pessimistic in the past month, with the Wande All A-index pulling back by more than 9%. Recently, with the rapid depreciation of the RMB exchange rate and the surge in the US bond interest rate, market risk preference has further declined, and the transaction volume of the full A has dropped to the lowest level since the core asset bubble collapsed in March 2021. The Wande All A Index stock risk premium (ERP) has also risen above the average of +1 standard deviation in the past five years. What are the characteristics of the emotional side when the market is in the bottom area? Has the current market sentiment reached a freezing point? In this report, we will evaluate the current market sentiment level from the aspects of market capital sentiment, behavior of listed companies and public opinion environment.
.1 and Market capital sentiment: It has approached the freezing point within two years
Trading volume and transaction volume reflect that the current trading sentiment has reached the market freezing point since 2021. Among the five emotional freezing points since 2021 (March, July, October, January, and April 2022), the trading volume and transaction amount of Wande All A fell to around 60 billion shares and 600 billion yuan respectively, and has reached this level, but it is still a certain distance from the market bottom in 2018. The freezing point of previous transaction volume in popular trading tracks is showing an upward trend. For example, the freezing point of the Mao Index's transaction volume from 2020 to 2021 continued to rise (28 billion in 2020, 78 billion in the first half of 2021). When the market style switches to new energy, the freezing point of previous transaction volume of power equipment has also increased compared with the previous one (35 billion in 2021, 43 billion in Q2 this year, and 63 billion in current), while the current transaction volume of the Mao Index is only close to the level in mid-2020.
turnover rate indicator shows that the current trading sentiment has also reached a low level within 2 years, and the turnover rate before the National Day may still maintain a downward trend. During the bull market since 2020, the market turnover rate center has risen overall (from 1.0% from 2018-2019 to 1.3% from 2020-2022), and is currently lower than the five emotional freezing points since 2021. In addition, the market turnover rate has declined before the National Day since 2019, mainly due to the long holiday time and high uncertainty overseas. Investors are more in a wait-and-see situation, and the sentiment of holding coins for the holiday is strong, and the turnover rate is still likely to decline before the National Day.
It is worth noting that the current investor shareholding experience may still be better than in April this year. Judging from the number of targets that have hit a six-month low in the market recently, it has not yet broken through the freezing point during the external shock disturbance period in April this year. Most targets did not break the new low since April. On September 19, the number of targets in the entire market that broke the new low in half a year was 540, while in April this year, this indicator reached a maximum of 3,134.
.2, People's behavior: Pessimism is still in the fermentation stage
From the historical data, the amount of stock repurchases has mostly rebounded before the market hits a stage of bottoming out, and has ushered in a repurchase climax within 1-2 months after the bottoming out. The scale of net reduction in industrial capital often shrinks rapidly before and after the market hits a bottoming out. From the perspective of stock repurchases, in the five phased bottoming markets since 2018, the range repurchases of listed companies have ushered in a climax of phased stock repurchases in January 2019, August 2019, April 2020, May 2021 and March 2022, lagging behind the market bottom in January-February, but in most periods, the stock repurchases of listed companies have shown signs of recovery in the month when the market bottomed.Judging from the changes in the scale of net reduction in industrial capital, the scale of net reduction in industrial capital usually decreases before the bottom, but it will shrink rapidly before and after the market bottoms out. Taking the phased bottoming out in January 2019 as an example, the scale of net reduction in industrial capital fell from 3.007 billion yuan on December 23, 2018 to 2.375 billion yuan on December 30, 2018, and it was significantly reversed to net increase on January 6, 2019.
In this round of decline, corporate repurchases are still at a low level. Although the scale of net reduction in industrial capital has gradually decreased, it has not yet reached the stage of rapid shrinkage; referring to the laws of historical data, the pessimism of listed companies is still in the fermentation stage. From the perspective of the scale of net reduction in industrial capital, among the five phased bottomings, the net reduction in industrial capital corresponding to the bottom market was -786 million yuan, 3.971 billion yuan, 9.522 billion yuan, 8.354 billion yuan and 3.362 billion yuan respectively. As of September 18, 2022, the net reduction of industrial capital holdings was 5 billion yuan, higher than the scale when it bottomed out three times, and there may still be room for downward in the future. In terms of the repurchase amount, among the phased bottoming since 2019, the repurchase amount before the bottoming was 11.87 billion yuan, 3.117 billion yuan, 7.225 billion yuan, 13.17 billion yuan and 18.083 billion yuan, respectively. From August 23, 2022 to September 23, 2022, the total monthly repurchase amount of all listed companies in A-shares was 520 million yuan, which is still a big gap from the repurchase amount before the bottoming out in the past, and there is still room for upward in the future.
The market sentiment freezing point in the past few rounds was accompanied by the release of positive information by official or listed companies, but no similar phenomenon has occurred in this round of market conditions. In November 2018, the three ministries and commissions jointly issued the "Opinions on Supporting Listed Companies' Repurchase of Shares", encouraging listed companies to repurchase stocks. In March 2022, listed companies with good performance announced their operating data in advance, and Moutai and other companies announced their monthly performance for the first time. In April 2022, the three departments issued the "Notice of on Further Supporting the Healthy Development of Listed Companies ", supporting listed companies to increase the proportion of cash dividends in profit distribution and share development dividends with investors. However, no similar phenomenon has occurred in this decline.
.3, Public opinion environment: There have been public opinion characteristics at the bottom of the market
Recently, the market has shown a turn of "killing white horses". In recent years, there have also been collective killing of white horse stocks at the bottom of the market. The main reason is that the fragile market sentiment amplifies the reactions of individual disturbance events, and the mismatch of the valuation performance of some white horse stocks, which leads to "killing valuations" under the marginal tightening of liquidity. Recently, the market has seen consecutive "killing white horses". "Blue horse stocks" such as Sanan Optoelectronics , Oriental Fortune , Mindray Medical , Star Semiconductor have successively fallen. Behind this, in addition to the overreaction of "bad news" such as tightening of medical beauty supervision and lowering service fees in financial institutions, it is also because some institutions have heavy holdings in "blue horse stocks" with mismatch in valuation performance, and the marginal tightening of liquidity has led to "killing valuation". Similar situations include "blue horse stocks" such as Meinian Health, China Duty Free, SF Holdings in April 2021, Gibit in October 2020, Gibit , Changchun Hi-Tech, Kweichow Moutai collectively fell, Dong'e Ejiao , Dazu Laser , and Kweichow Moutai fell sharply in July 2019, which all occurred during the time when the market trading volume was significantly shrinking, US Treasury yields rose or high fluctuations.
Recently, the official media released a statement to boost market confidence. Similar situations have also occurred when market sentiment fell to freezing point in the past. has been fluctuating continuously and downward in recent times. Official media once again spoke out to protect the market . On September 20, Securities Daily published an article titled "3100 points don't worry, strengthen confidence and look at the long-term" to boost market sentiment. Looking back on the fact that market sentiment has also occurred in recent years. After the A-share market experienced a third round of sharp decline this year in April this year, on April 26, Shanghai Securities, Futures , and Fund Association jointly spoke out "firmly maintain market stability and give full play to the positive role of industry institutions"; in February 2021, track stocks collapsed, and on February 26, Securities Times published an article "The capital market is promising, and regional coordination will open up new space" to boost market sentiment. In addition, in January 2019 and August 2019, official media have all shouted to boost market confidence.
.4, When will the A-share market sentiment improve in this round?
Overall, the overall sentiment of A-shares has dropped to the low point since 2021, but the pessimistic expectations of listed companies and the impact of negative public opinion are still fermenting, and short-term market sentiment may be difficult to significantly improve. combined with the observations of three levels of market capital sentiment, listed company behavior and public opinion environment, the current capital sentiment in the A-share market has declined significantly, and the scale of net reduction in industrial capital has also shown a downward trend. The overall market sentiment has dropped to the low point since 2021. However, compared with the ice point of market sentiment in the past, the current repurchase scale of listed companies is still at a low level, and the impact of negative public opinion is still fermenting. Coupled with the recent rise in overseas economic uncertainty and the arrival of the National Day holiday, short-term market risk preference may remain low.
The opportunity for the improvement of A-share market sentiment in the future comes from the slow release of external suppression factors, such as the US dollar index ends to rise rapidly; on the other hand, it also requires the repair of confidence, which can be observed from the behavior of listed companies and the public opinion environment. The decline in this round of A-share market is caused by internal and external factors. On the one hand, in the situation of increasingly fierce conflict between Russia and Ukraine and severe European energy crisis, expectations of the Federal Reserve's interest rate hike in have risen again, and the rapid rise of US Treasury bond interest rates and the US dollar index has prompted the global capital market to heat up risk aversion sentiment. On the other hand, the domestic economy was average in September, and there was no substantial change in the epidemic and real estate, and the market's confidence in the domestic economy is still insufficient. Therefore, the future improvement of A-share market sentiment also requires the alleviation of these two risk disturbance factors.
During the market bottoming process, the value sector has a phased advantage, and small and medium-sized growth is an opportunity for layout after the pullback. 's current full A valuation level has fallen to its low level in the past five years, and the market allocation value is gradually emerging. In the short term, in the environment of sluggish risk appetite, the market will still be in a process of style rebalancing, and the value sectors with defensive attributes will have a phased advantage, including home appliances, home furnishings, consumer building materials, etc. after real estate completion, as well as high-quality leading stocks and banks in real estate. In the medium and long term, under the background of economic structural adjustment and "destroying the old and establishing the new", small and medium-sized growth is an opportunity to make arrangements after the pullback, focusing on investment opportunities in new energy industries and hard-core technology, independent and controllable fields. The key changes in the three factors of
and and the preferred industry
The latest economic high-frequency data shows that the supply-side operating rate has risen, the demand-side recovery has differentiated, automobiles are better than real estate, and the leading indicators in foreign demand have shown a significant decline in exports. The domestic ten-debt interest rate rose slightly, the US Treasury interest rate and the US dollar index continued to rise, the RMB continued to depreciate and approached the 7.1 mark, and foreign capital continued to flow out. The market continued to decline this week, with consumption and growth style leading the decline, and the national epidemic has remained stable recently.
.1 Key changes tracked by the three factors of economy, liquidity, and risk preference
Latest economic high-frequency data shows that the supply side operating rate has risen, the demand side has recovered and differentiated, automobiles are better than real estate, and the leading indicators in foreign demand have shown a significant decline in exports. Judging from the latest economic high-frequency data, the operating rates of various production ends have increased to varying degrees. The operating rates of Tangshan blast furnaces remained basically the same in the fourth week of September, and the operating rates of tyres have risen significantly in the fourth week of September. The recovery on the demand side has differentiated, and real estate sales are still relatively sluggish. Among them, the transaction area of commercial housing in major and medium-sized cities in September fell by about 32% year-on-year, with a downward increase compared with August and is closer to July. We will pay attention to the impact of real estate sales in late September, especially during the end of the quarterly window. The overall performance of automobile sales was acceptable. From September 1 to 18, the passenger car market sold 794,000 units, an increase of 10% year-on-year and a decrease of 7% from the same period last month. From the perspective of external demand, South Korea's export volume decreased by 8.7% year-on-year in the first 20 days of September, and the number of start-up days was 13 days, a decrease of 1.5 days from the same period last year. The average daily export volume increased by 1.8% year-on-year, which is more obvious. We need to be vigilant about the weakening of foreign demand in the future. Overall, judging from the latest high-frequency economic data, the supply-side operating rate has risen, the demand-side recovery has differentiated, automobiles are better than real estate, and South Korea's exports have declined significantly in terms of foreign demand.
Domestic 10 bond interest rates rose slightly, US bond interest rates and US dollar index continued to rise, the RMB continued to depreciate and approached the 7.1 mark, and foreign capital continued to flow out. From the perspective of domestic market interest rates, the domestic ten bond interest rate has risen slightly to around 2.68%. Domestic liquidity is generally abundant, with short-term interest rates stable at around 1.6%, but it is still significantly lower than the 2% reverse repurchase policy interest rate level. Overseas, U.S. Treasury yields continued to rise to 3.7%, and real interest rates rose significantly to more than 1.2%. exchange rate , the US dollar index continued to rise, and the RMB exchange rate continued to depreciate, approaching the 7.1 mark. From the perspective of market liquidity, foreign capital showed a continuous outflow this week, and it was outflowed in four of the five trading days.
The market continued to decline this week, with consumption and growth style leading the decline, and the national epidemic has remained stable recently. A-shares continued to fall in the past week. Among all styles, consumption and growth led the decline, finance and cyclical declines were within 1%, and trading volume shrank significantly. Judging from the changes in the epidemic, the national epidemic has remained stable recently, with the number of confirmed cases remaining at about 100 on the same day, and the number of asymptomatic infections of maintained to about 600 on the same day.
.2, 9 industry allocation: non-bank finance, food and beverage, power equipment
The main idea of industry allocation: Looking forward to September, it is expected to maintain a stable market under the assumption that the momentum of economic recovery momentum is marginal and liquidity maintains a reasonable level of liquidity. In terms of economy, with the efforts of the previous policy, weak sectors such as real estate and consumption in the early stage are expected to usher in an upward period similar to June. Strong sectors such as exports and infrastructure remain resilient under the support of exchange rate depreciation and the start of policy-based financial bond projects. In terms of liquidity, after the interest rate cut in mid-August, liquidity is likely to continue to be affluent in September. In terms of style, the strengthening of economic recovery momentum is expected to lead to a phased rebalancing of the market style, but the value reversal may only be phased, and a trend reversal requires a strong rebound in the momentum of economic recovery momentum. Against the backdrop of economic structure adjustment and "breaking the old and building the new", the downward movement of the total economic growth center is relatively good for the growth market, and small and medium-sized growth is an opportunity to make arrangements after the pullback. In terms of configuration, it is recommended to pay attention to the rebalancing of short-term value styles and the layout of the track with certainty in the long-term economy. Including 1) Non-bank sectors with low valuations and expected catalyzing of the comprehensive registration system reform, such as securities companies, insurance, diversified finance and other industries; 2) Consumer sectors with reversing difficulties and demand ushering in peak seasons, such as agriculture, forestry, animal husbandry, fishery, mass consumer goods, and liquor sectors that benefit from improvements in both income and costs; 3) Some growth sectors with positive performance in the interim report period and high prosperity are certain, such as some new energy chain-related non-ferrous metals , basic chemical industry, and To G-attribute power equipment, national defense and military industry, etc. The first choice industry is non-bank finance, food and beverage, and power equipment in September.
? Food and beverage
One of the supporting factors: 's current pessimistic expectations are gradually fulfilled, and we are optimistic about the sector market after the Mid-Autumn Festival expectations drop to a low level. The demand for the liquor industry remains stable, and sales-oriented wine companies will continue to grow. After the bubble of small wine companies is squeezed out during the peak Mid-Autumn Festival this year, their share will return to high-quality brands. The future industry will still be a differentiated market. The pressure on third- and fourth-tier wine companies and small sauce liquor does not represent the real fundamentals and trends of the industry.
Supporting factors: In the medium and long term, the direction of demand improvement remains unchanged. When the economic environment is affected, the overall operating pace of food leaders is also more stable. gradually weakened with the impact of the epidemic in the second half of the year, costs gradually declined from high levels, and the base of the statement is gradually falling. At the same time, some sectors and leading stocks have fully reflected pessimistic expectations and have now returned to a low valuation level.
Supporting factors: the increase in outdoor activities and the hot weather have driven the increase in consumption of beverages, tobacco and alcohol on a month-on-month basis. After the normalization of epidemic prevention and control, residents' outdoor activities increased. In addition, the high temperature weather stimulated the rapid growth of demand for beverages and beer, and beverages, beer and other products entered the peak consumption season.
targets: Kweichow Moutai, Jinshiyuan, Qiaqia food product, Bairun shares , etc.
? Non-bank finance
One of the supporting factors: The China Securities Regulatory Commission formulated and issued the "Announcement on the Inclusion of Trading Open-End Funds in Connectivity Related Arrangements", which is beneficial to securities companies and public funds. Since the opening of the stock market trading interconnection mechanism between the mainland and Hong Kong, it has maintained stable and orderly operation and promoted the common development of the capital markets of the two places. Deepening the trading interconnection mechanism between the mainland and Hong Kong stock markets is not only conducive to enriching the types of trading products and providing more convenience for foreign investment in China's capital market, but is also of great significance to promoting the mutual integration of the capital markets of the two places and further opening up the capital market.
Supporting factors: The seminar on the reform of the comprehensive registration system was successfully held, and securities firms investment banking business benefited. On June 25, the National Finance and Development Laboratory and the Institute of Finance of the Chinese Academy of Social Sciences jointly held a seminar on the reform of the comprehensive registration system . The implementation of the comprehensive registration system reform will further smooth the investment and financing ends, improve the vitality and resilience of my country's capital market, improve the virtuous cycle of "technology-industry-capital", promote the formation of a more complete financial service system, and enhance the efficiency of the capital market serving the high-quality development of the economy.
The third supporting factor: The China Securities Regulatory Commission issued the "Regulations on Supervision and Administration of Publicly Offered Securities Investment Fund Managers", which is beneficial to securities companies' asset management business. The long-term situation of residents' wealth without markets will be improved . This year's epidemic has enhanced people's awareness of risk, and the need for individuals and families to smooth consumption and avoid risks through financial management, insurance, etc. is becoming increasingly urgent. The issuance of the "Management Measures" marks the official implementation of the long-awaited "one participation, one control and one brand" in the industry, and the potential for wealth management needs of Chinese residents will continue to be released.
targets: Oriental Fortune, GF Securities , Guolian Securities , CITIC Securities , etc.
? Power equipment
One of the supporting factors : The Political Bureau of the CPC Central Committee held a meeting to speed up the construction of the new energy supply and consumption system. The meeting mentioned that "we must improve the energy resource supply guarantee capacity and increase efforts to plan and build a new energy supply and consumption system", which will also be conducive to the development of wind and light resources, surrounding coal-fired power projects, and ultra-high voltage construction.
Supporting factors: Shanghai will realize all roof photovoltaics installation, which is beneficial to photovoltaic companies. On July 28, the Shanghai government issued the "Shanghai Carbon Peak Implementation Plan", which proposed that by 2025, the photovoltaic coverage rate of rooftops of public institutions and industrial plants will reach more than 50%; by 2030, all installations will be achieved. At the same time, some cities including Shanghai have issued subsidies related to new energy such as wind power, and the introduction of clean energy and electricity has been continuously strengthened, and the market space is broad.
Supporting factors: photovoltaic industry installed capacity continues to grow, and strong domestic and foreign demand promotes rapid growth of installed capacity throughout the year. According to National Energy Administration data, my country added 30.878 million drywatts in the first half of the year, and the cumulative installed capacity of photovoltaic power generation reached 340 million kilowatts, an increase of 25.8% year-on-year. On the demand side, on the one hand, many provinces and cities in my country have issued photovoltaic support policies, and installed capacity is expected to accelerate again in the second half of the year; on the other hand, the European market continues to rise under the combined effect of increasing energy supply and high temperature and scorching heat, and the European photovoltaic installed capacity demand is expected to continue to grow.
target: Tongwei Co., Ltd. , Longi Green Energy, Yijing Optoelectronics, Jingsheng Mechanical and Electrical, etc.
, risk warning
liquidity tightens beyond expectations, the economy stalls downward, Sino-US frictions intensify, the epidemic worsens beyond expectations, historical data is for reference only, uncertainty in the target company's future performance, etc.
This article comes from the financial world
