Many factors help the Shanghai stock index to reach the upper line in heavy volume
Historical data shows that after the Spring Festival, A shares have a high probability of rising
Ren Shibi
On January 16, the three major A-share stock indexes collectively rose, and the A-share market became more bullish. The Shanghai Composite Index rose 1.01% and regained its annual line, the Shenzhen Component Index rose 1.58%, and the ChiNext Index rose 1.86%.
In the 10 trading days since the beginning of this year (January 3 to 16), the overall performance of the A-share market has been relatively good. Flush data shows that the three major A-share indexes have all achieved gains during the period. As of the close on January 16, the Shanghai Composite Index rose by 4.48% during the period, the Shenzhen Component Index rose by 6.99% during the period, and the ChiNext Index rose by 8.21%; The average daily turnover of the two cities also showed a trend of heavy volume. During the period, the cumulative turnover was 7.850496 billion yuan, and the average daily turnover reached 785.050 billion yuan. Compared with the average daily turnover of 637.671 billion yuan from December 19 to 30, 2022, the increase up to 23.11%.
Chen Li, chief economist and director of the research institute of Chuancai Securities, said in an interview with a reporter from the Securities Daily that there are four reasons for the recent continuous strength of the three major A-share indexes: first, expectations of US interest rate hikes are gradually cooling down, and global liquidity The tightening situation has improved; secondly, from the domestic macro perspective, the economy is expected to continue to pick up, and corporate profits will gradually pick up, which will support the fundamentals of A shares; thirdly, from the perspective of liquidity, it is expected that the annual liquidity will increase. Keep the overall reasonable and sufficient; Finally, from the perspective of incremental funds, with the steady rise of the RMB exchange rate, the net inflow of northbound funds is expected to continue.
Yuan Huaming, general manager of Huahui Chuangfu Investment, who holds the same view, told reporters that favorable policies to promote economic recovery and support the development of the capital market have been intensively introduced recently; market liquidity will remain reasonably sufficient; as major overseas economies show downward signs of inflation , external demand and liquidity are also improving marginally. These positive factors have boosted market sentiment and promoted the continuous upward movement of the A-share market in the near future.
How will the A-share market perform after the Spring Festival? Institutions generally believe that the current market valuation is still at a relatively historically low level, and the recovery of the market has not yet ended, and it is still a good time to increase positions.
CITIC Securities stated that historical data shows that A shares have a higher probability of rising after the Spring Festival. Since 2000, more than 70% of the years in which the Shanghai Composite Index rose in the 20 trading days after the Spring Festival, with an average increase of 2.5%.
“Recently, various funds have accelerated the deployment of A shares. We are full of confidence in the A-share market after the Spring Festival.” Liu Youhua, deputy director of the wealth research department of Paipai.com, told reporters. On the one hand, since the beginning of this year, the cumulative net purchase of northbound funds has reached nearly 80 billion On the other hand, the market is full of confidence in the economic recovery in 2023. With the optimization of epidemic prevention and control measures, production and life in various places have begun to return to normal, and more measures to stabilize the economy may be introduced in the future. The market’s confidence in economic recovery is growing.
Embrace growth and look forward to spring
Zhao Ziqiang
The Spring Festival is approaching. While looking forward to the spring, investors are also faced with the choice of holding stocks or holding currency for the festival. In particular, the Shanghai stock index increased in volume yesterday, standing on the annual line, which added subtle weight to this multiple-choice question.
The advantage of choosing to hold currency is that you can avoid various uncertain risks during the long holiday, and you can also earn interest income. However, the author believes that all aspects of the domestic market are expected to be positive, and many high-quality growth stocks in A-shares have investment value, and holding shares is more attractive than holding currency. The main reasons are as follows:
First of all, this year’s domestic economy is expected to be better and the trend is becoming clearer. The Central Economic Work Conference emphasized that “promoting the overall improvement of economic operation”. With the continuous introduction of stable growth policies in key areas such as expanding consumption, ensuring people’s livelihood, and the stable and healthy development of the real estate market, the economy has shown a stable and upward trend. Recently, the local two sessions have been held one after another, and the expected GDP growth rate in many places in 2023 will exceed 5.5%.
Second, Chinese assets are more attractive to international capital. On January 16, the onshore and offshore renminbi against the US dollar rose above the 6.7 mark for the first time since July 2022. Since 2023, it has increased by more than 2,000 basis points, and it has increased by more than 6,000 basis points from early November last year. At the same time, the yield of China’s 10-year treasury bond has risen to 2.9175%, the highest since 2021, and the spread with the U.S. 10-year treasury bond yield has narrowed from last year’s high of 150BP to 60BP. Since the market has weakened, some funds have obviously flowed back. In addition, at the end of last year and the beginning of this year, my country issued a number of policies to support the introduction of foreign capital, which greatly improved the convenience of overseas capital investment in the Chinese market. Statistics show that since November 2022, Beijing funds have shown a continuous net buying trend. From January 3 to January 16 this year, the net purchases of Beijing funds reached 79.858 billion yuan.
Third, the valuation of the A-share market is still at a historically low level. From the perspective of valuation, even after the rebound at the beginning of the year, the valuation recovery of some A-share broad-based indexes is still limited. For example, from the perspective of PE, the PE (TTM) values of CSI 300, CSI 500 and CSI 1000 on January 13 were 11.87 times, 23.30 times and 29.09 times respectively, and the historical quantile values were all below 30 times. From the perspective of PB, the historical quantile values of the above three indexes are all below 20 times, and the CSI 500 is the lowest, and its PB of 1.74 times is lower than 93% of the historical period.
Fourth, high-quality growth stocks are worth investing in. At present, 331 A-share listed companies have disclosed their 2022 annual performance forecasts, of which 233 have pre-congratulations. From January 3 to 16, 204 of the above-mentioned 233 companies had their stock prices rise, accounting for nearly 90%; 188 companies had their stock prices rise by more than 1.5% (one-year deposit rate) during the period. Analysts believe that the annual report market is expected to start, and high-quality growth stocks will become the target of capital competition.
In the context of a sound economy, capital inflows, and upward market movements, whether to hold stocks or hold coins during the Spring Festival holiday, I believe that the majority of investors already have the answer.
Disclaimer: The Securities Times strives for truthful and accurate information, and the content mentioned in the article is for reference only and does not constitute substantive investment advice, so operate at your own risk
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