Author | Caijing New Media Jiang Jinli Editor | Jiang Shizhou
The warm spring has arrived, but the capital market is still "pouring spring cold".
Entering April, the stock market is still volatile. On April 7, the third trading day of the month, the three major stock indexes continued to be weak. By the close, the Shanghai index was down 1.42 percent, the Shenzhen component was down 1.65 percent and the ChiNext was down 2.10 percent.
More than 4100 stocks in the two cities fell, and 32 stocks fell to a halt. Most of the real estate stocks fell, digital currency, aquaculture, and medicine fell in the front, and cement, coal, and chemicals bucked the trend.
For the reasons for the market decline on the day, Huaxia Fund analysis is mainly affected by triple pressure: first, the Fed minutes released more hawkish signals, triggering an overnight sharp decline in US stocks; second, the market is worried about the risk of escalation of geopolitical conflict confrontation; third, the domestic epidemic has not yet appeared an inflection point, and the short-term increase in economic operation pressure.
"The equity market in the first quarter can be described as internal and external troubles, and the external impact is greater than the internal worry." Chuangjin Hexin Fund concluded, expanding:
Externally, in the face of the triple shock of the Russian-Ukrainian conflict, the Fed's interest rate hike, and Chinese supervision, commodity prices have soared, further exacerbating the stagflation pattern; shrinking macro liquidity has also continued to suppress long-term asset valuations.
Internal stable growth policies have been introduced, but the policy force - stable growth to take effect still needs a process, upstream price increases have exacerbated cost pressure, the epidemic has repeatedly suppressed consumer demand, and the confidence of growth momentum is insufficient.
Looking back at the first quarter, the industry sector fell collectively deeply, the decline adjusted inflation trading resources were king, the coal industry rose by 23 percentage points in the quarter, the petroleum and petrochemical, non-ferrous metals, and steel industries also fought against each other, while the real estate and banks on the low valuation and stable growth chain also ranked high.
The "haze" of the capital market has not dissipated, standing at this point in time, what should the investment in the second quarter do?
Asset allocation: three core influencing factors
Chuangjin Hexin Fund believes that the core factors affecting asset allocation in the second quarter mainly focus on policy effects, industrial profit distribution patterns, and changes in the external environment:
First, the current industrial profits are excessively concentrated in the upstream, the cost pressure in the middle and downstream is significant, pay attention to policy guidance and industrial spontaneous adjustment, and how the industrial profit distribution pattern evolves;
The second is whether the geopolitical conflict is gradually approaching substantive relaxation, and the logic of the transaction theme based on war has changed;
The third is how the Fed responds to persistently high inflation, and whether accelerated contraction will impact its own economy, finance and strengthen the vulnerability of emerging countries;
In terms of market transaction logic and the core focus of the market in the second quarter, Bosera Fund recommends focusing on five aspects: the progress of geopolitical conflicts, the impact on commodities and China; changes in overseas inflation rates and the response of monetary policy; the implementation and effect of the steady growth policy; whether the plight of private real estate enterprises will be alleviated; and the control of the epidemic, especially the performance after the introduction of new coronavirus drugs.
A share: short-term grinding bottom, long-term cost performance is outstanding
"There are still disturbances in the short term, and the general trend does not have to be pessimistic" In the view of Huaxia Fund, after the adjustment in the first quarter, under the policy care, fundamental support and liquidity boost, the market still has a rebound foundation after repeated bottoming, especially from a long-term point of view, the investment cost performance has been very prominent.
Bosera Fund believes that in terms of the macro environment, the current stage is "stable credit / wide currency + economic weakness", and the quarterly dimension A shares have repeated grinding demands. The implied ERP of the CSI 300 has been repaired above the mean, and the medium-term trend of ERP also depends on the subsequent economic growth trend.
From the rhythm point of view, A-share U-shaped throughout the year, index beta opportunities in the "wide credit + economic bottom up" verification, 2022 is an important observation point. High dividends and broader market values from an ERP perspective have been the cheapest in the past 10 years, and they have been rebalanced in the direction of high dividends by taking advantage of the oversold growth rally.
In terms of industry comparison, Boshi Fund pointed out that in the first quarter of 2022, the energy and new energy industries are relatively dominant, and the downward trend of A-share profits highlights the scarcity of the direction of high prosperity. Avoid industries with a high proportion of bulk raw material costs and the risk of downward revision of profit expectations, such as white electricity, automobiles, power grids, building materials/part of chemicals, etc.
From the perspective of the risk-return situation of A-shares, the first quarter showed a downward trend, and the Shanghai Composite Index fell the least in the index, at -10.68%. Balanced style stocks in the market style fell the least, at -5.17%.
Qianhai Open Source Fund said that from the perspective of various industries, combined with the economic development situation and policy prediction in the fourth quarter, consumption, cycle, manufacturing and real estate as a whole were given over-allocation ratings, and other sectors were given standard ratings.
"In the second quarter, the market is highly likely to be biased towards shocks, first rising and then suppressing, before May the market opportunity is greater than after, the whole year must still be vigilant against the downward movement of the lower limit of the retracement." Chuangjin Hexin Fund focuses on recommending energy (coal, oil), short-term vigilance against fluctuation risks brought about by geopolitical conflict mitigation; attention to the real estate infrastructure chain; digital economy focus on digital infrastructure and meta-universe themes; and moderate attention to the agricultural pig chain.
Hong Kong stocks: Stay cautious and wait for the inflection point
Hong Kong stocks experienced ups and downs in the first quarter of 2022, leading the global market in January, but they were the most hurt by the wave of foreign returns. When it comes to their views on Hong Kong stocks, some fund companies have mentioned the word "caution".
Chuangjin Hexin Fund judged that the shortest short-term repair stage of Hong Kong stocks may be in the past, and the follow-up high probability of shock repair, but there is still a possibility of secondary bottoming in the medium term. Combined with the current fundamentals, the probability of A-shaped reversal in the Hong Kong stock market is small, and the bottom casting will take longer.
And pointed out that the rapid decline of Hong Kong stocks this time than expected, foreign capital outflow is an important driver, essentially based on the risk aversion behavior of Sino-US decoupling, "from what we know, the attitude of Wall Street buyer institutions to the future anti-globalization trend is still conservative, and the low valuation of Hong Kong stocks does not constitute a strong reason to buy under political risks."
At the same time, the allocation of funds from the south to Hong Kong stocks has increased, showing the confidence of domestic investors in the core targets of Hong Kong stocks. Chuangjin Hexin Fund analysis, foreign capital withdrawal and domestic capital inflow means that the change in the structure of Hong Kong stock investors began to accelerate in both directions, with the return of China, the Hong Kong stock market will become an important allocation market for domestic funds in the future, but the process will still be full of twists and turns.
Bosera Fund also believes that in the second quarter of 2022, the domestic transition from the policy bottom to the economic bottom, the liquidity crunch under high overseas inflation accelerated, and the overall Hong Kong stock market still needs to remain cautious. Structural recommended attention: first, photovoltaic wind power and energy metals that are currently at a high level of prosperity and have continuity; second, upstream resource products that benefit from high overseas inflation.
"Looking forward to the second quarter, there will be no particular optimism about Hong Kong stocks, but there is no need to be overly pessimistic." Qianhai Open Source Fund pointed out that the outbreak of the epidemic in Hong Kong, the international situation is unclear, the inflation is high, the DOLLAR risk aversion is strong, the superimposed economic slowdown and even the doubts about the economic growth target have caused market participation and sentiment to be poor in the short term.
"But because of this, the valuations of many excellent companies have reached historic lows." Qianhai Open Source Fund said that it can now be less desperate and wait for the clear inflection point such as the overall economic slowdown and reversal and the relaxation of the international situation.