Weekly market review
Last week, the CSI 300 index fell 1.06%, the Shanghai Composite Index fell 0.94%, the Shenzhen Component Index fell 2.20%, and the ChiNext index fell 3.64%; by industry, the top three gains last week were:
- The building decoration sector (+6.06%) rose first, mainly due to the market expectation stimulus policy exceeding expectations under the pressure of stable growth;
- The steel sector (+3.97%) rose second, mainly due to the strengthening of policy expectations in the real estate and infrastructure sectors;
- The building materials sector (+3.93%) rose third, mainly due to the real estate and infrastructure market related policies are expected to ease economic pressure.
The top three declines are:
- Agriculture, forestry, animal husbandry and fishery sector (-4.72%) fell first, mainly because the industry continued to be in a clear state;
- The power equipment sector (-4.68%) fell second, mainly due to the growth of economic growth pressure expectations;
- The electronics sector (-4.67%) fell third, mainly due to the pressure of economic growth, and the growth of the industry was bearish.
Valuation performance
From the perspective of absolute valuation, social services, national defense and military industry, and comprehensive industries are at a high level; banking, steel, and building decoration industries are at a low level.
Source: wind
Relative valuations (since 2011) have seen social services, automotive and beauty care at relatively high levels; the electronics, transportation and media sectors are at low levels.
Central European perspective
The upstream cycle industry and the stable growth related to the real estate, building materials and other industries continue to outperform, while the emotional impact of the growth industry is further enhanced. In the face of the impact of many events (Russian-Ukrainian conflict, Sino-US relations, etc.) and the continuous spread of the epidemic in China, the market's risk appetite has continued to decline. After the National Standing Committee, the expectation of monetary policy tools such as RRR cuts and interest rate cuts is further heating up. However, if we take into account the pressure on raw material prices, the us-China spread is already in a low position, and the net interest margin of banks is already low, further relaxation may be limited.
The negative impact of the closed management brought about by the current "dynamic zero clearance" policy on the economy is still increasing, which may delay the time point when the actual investment end will start after the implementation of the stimulus policy. As a result, the short-term sentiment of the market is relatively sluggish, but with the gradual results of the follow-up epidemic prevention and control work, the market is expected to gradually emerge a fundamental inflection point after the recovery of economic activities.
Configuration recommendations
Short-term defensiveness is still relatively important, it is recommended to pay attention to valuation, dividend yield and other advantageous industries such as finance and real estate, in addition to the possibility of large repurchases of Chinese stocks and Hong Kong stocks after the end of the annual report silent period, it is recommended to pay attention to the mapping of relevant targets for media, real estate and computer industries. Continue to be optimistic about new infrastructure areas with high growth and high certainty in the medium term, especially energy infrastructure, green power and digital infrastructure. Based on the fact that market oscillation and stabilization often require a long period of judgment, the configurable window period of the above industries is still long, so there is no need to rush to "grab the rebound".