Top 10 Brokerages Weigh in on A-Share Market Outlook
As the Spring Festival approaches, the A-share market is under scrutiny. The Paper has gathered insights from 10 securities firms to understand the market outlook. Most of them believe that the recent market adjustments are driven by transaction levels rather than fundamentals. With the rapid clearing of micro-trading structures, a stabilization of the stock market is on the horizon, hinting at potential momentum for recovery.
One such firm, CICC, stated that the current market valuation and transaction sentiment indicators are in the historical bottom range, making A-shares an attractive investment. Additionally, the introduction and implementation of policies aimed at stabilizing growth and expectations are expected to boost investor confidence, leading to potential market recovery.
Similarly, CITIC Securities attributes the recent market adjustments to the level of funds and micro-liquidity, and anticipates a rapid and violent market repair following the current adjustments.
In terms of allocation, dividend assets appear to be a promising direction, as advised by CICC and West China Securities. CICC suggests focusing on a combination of offensive and defensive recovery and dividend assets, while West China Securities highlights the dividend market of central enterprises as the main line for investors.
Looking forward, CICC remains optimistic about the market outlook, indicating that favorable conditions exist, and additional policy responses may bolster investor confidence and market recovery. However, they caution that market volatility may still persist in the short term.
Meanwhile, Everbright Securities anticipates a market sentiment pickup in February, projecting a smooth rebound window around the Spring Festival. They recommend focusing on industries such as petroleum and petrochemicals, non-bank finance, pharmaceutical biology, media, basic chemicals, and electronics.
On the other hand, Huaan Securities advises patience, hinting at a need to wait and see as the market continues to fluctuate until there’s a significant improvement in economic fundamentals or macro policies.
Despite differing viewpoints, the general consensus among the brokerages is that the A-share market may be approaching a bottom and stabilization. While volatility in the short term is expected, the potential for market sentiment to pick up in February offers a glimmer of hope for investors.