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Improved relationships are likely to boost market risk appetite

Improved relationships are likely to boost market risk appetite

Last week, the market fluctuated slightly, with the Shanghai Composite Index and ChiNext Index rising 0.27% and 1.88% respectively, with a net outflow of 7.995 billion yuan in northbound funds. In terms of industries, TMT sectors such as media, computers, and communications and coal led the gains, while food and beverage, petroleum and petrochemical led the decline. 

The main drivers of the recent market rally are the end of Fed rate hike expectations and the recovery of the domestic economy. But last week, Fed officials gave hawkish speeches, mentioning that the Fed could still raise interest rates in the future. Officials generally say inflation remains too high and fighting it is a top priority.

In addition, the recently announced domestic inflation and PMI in October have signs of marginal decline, reflecting that there are still twists and turns in the current demand recovery, and it is still necessary to continue to exert efforts to stabilize growth.

Improved relationships are likely to boost market risk appetite

However, looking ahead, although there are short-term disturbances, the general direction of the US dollar falling from its high level and the stabilization of the domestic economy at the bottom has not changed, and the main factors that previously suppressed market risk appetite have been eased. 

In addition, there are obvious signs of warming in Sino-US relations, and the APEC summit will be held this week, and the meeting between Chinese and US leaders may become the focus of market attention. 

The current valuation and trading sentiment of the market are at historically low levels, and the subsequent downside may be limited. Domestic policy increases, economic recovery process, and the inflection point of overseas U.S. bond interest rate trends may have an impact on the rhythm of A-shares, and the bottom area can pay attention to investment opportunities in high-elasticity broad-based ETFs focusing on small and medium-sized caps, such as the Science and Technology Innovation Board 100 ETF (588120) and 2000 ETF (561370).

Improved relationships are likely to boost market risk appetite

Source: Wind

As the Federal Reserve's interest rate hike comes to an end, the global biopharmaceutical investment and financing environment can be expected to improve, and a new round of financing for biotech companies will bring incremental investment in R&D pipelines and a new round of order cycles in the CXO industry.

In the first three quarters of 2023, the total global biomedical financing was 326.786 billion yuan, a year-on-year decrease of 21.22%; Among them, the total financing of biopharmaceuticals in China was 54.156 billion yuan, a year-on-year decrease of 39.5%. In the third quarter, compared with the second quarter, the global biomedical financing volume increased by 34.13% quarter-on-quarter, and the overseas market has taken the lead in recovery.

In addition, the National Health Insurance Administration recently stated that it is adjusting the pricing policy of innovative drugs and adopting relatively relaxed management of the prices of innovative drugs in the early stage of marketing. In addition, in July, the Shanghai Medical Insurance Bureau took the lead in introducing commercial insurance and other types of insurance, and the domestic diversified payment system is constantly taking shape. 

Judging from the recent fire in the weight loss drug market, Novo Nordisk and Eli Lilly, the two global giants in weight loss and blood sugar reduction, have successively announced their financial reports for the third quarter of 2023, and the weight loss and diabetes businesses have driven the performance of the two companies to exceed expectations. GLP-1 became the strongest contributor to revenue: Novo Nordisk semaglutide contributed 60% of revenue in the first three quarters. Eli Lilly's sales of tirpatide in the third quarter of 2023 reached $1.409 billion, an increase of more than 60% compared to the second quarter.

The GLP-1 products of the two leading enterprises have also opened up a huge market space for the peptide drug industry chain and driven the expansion of the entire upstream and downstream industry chain. The domestic industrial chain, such as leading CDMOs, peptide APIs, and companies with advanced research and development of related new drugs, are expected to benefit. 

The pharmaceutical sector has undergone adjustments in the past few years, and the low point of policy expectations and performance may have passed, and the fourth quarter is expected to usher in both performance and policy improvement. In the low-base environment, the recovery of revenue and profit growth and the gradual realization of innovative pipelines are expected to bring about a systematic improvement in the prosperity of the pharmaceutical sector, and the investment opportunities of related targets such as biomedical ETF (512290), medical ETF (159828), vaccine ETF (159643), and innovative drug Shanghai-Shenzhen-Hong Kong ETF (517110) are highlighted. 

The collective rebound in AI-related sectors was mainly stimulated by the positive progress of GPT. Last week, OpenAI released custom GTPs, which allow users to create their own GPTs without writing code. In addition, the GPT4 Turbo version was released, and the fees were significantly reduced. As of November 11, both third-party websites gptstore.ai and gptshunters.com have collected more than 3,000 GPTs.

The launch of these products will lower the threshold for the development and application of large models and promote the increase in demand; At the same time, the market can produce more high-quality GPT products by itself to promote the development of the AI application ecosystem. In the future, relevant enterprises can develop their own AI products for different scenarios, and also involve multimodal fields such as voice, image, and text, to accelerate the commercialization of AI. 

Mapping to the domestic industrial chain, from the computing power side, in October, the U.S. Department of Commerce issued the final rule on semiconductor export controls to China, further tightening export restrictions on AI-related chips and semiconductor manufacturing equipment to China. In the medium and long term, the sanctions imposed by the United States, the Netherlands, and Japan have landed, and the domestic semiconductor chip industry chain is expected to accelerate import substitution under the urgent need for AI development. The short-term consumer electronics and semiconductor chip cycles are expected to gradually come out of the bottom, and you can pay attention to the low-level layout opportunities of chip ETFs (512760), semiconductor equipment ETFs (159516), and integrated circuit ETFs (159546).

On November 1, Wenxin Yiyan launched user-oriented membership and joint member services, taking the lead in realizing fees. With the continuous iteration of domestic large models and the general upgrading of capabilities, it is also worth looking forward to the realization of industry performance for software ETFs related to model development and data supply. 

In addition, on the application side, the game ETF (516010) is still the direction that can be focused on. The recent explosion of interactive film and television games mainly meets people's needs for personalized, immersive, and immersive experiences. In the future, after the combination of AI, this kind of game can further enrich the gameplay and increase the content supply, such as realizing the characters and plots of "thousands of people and thousands of faces" through AI face swapping. With the improvement of the supply side brought about by the normalization of game version number distribution, new games from domestic manufacturers have been launched one after another, driving the performance growth of the industry.

Risk Warning:

Investors should fully understand the difference between regular and fixed investment of funds and savings methods such as small deposits and withdrawals. Regular investment is a simple and easy way to guide investors to make long-term investments and average investment costs. However, regular investment does not avoid the inherent risks of fund investment, does not guarantee investors to obtain returns, and is not an equivalent financial management method to replace savings.

Whether it is a stock ETF/LOF fund, it is a securities investment fund with higher expected risk and expected return, and its expected return and expected risk level are higher than that of hybrid funds, bond funds and money market funds.

Investors should pay attention to the fact that the fund's assets are invested in stocks on the STAR Market and ChiNext Board, which will face unique risks caused by differences in investment targets, market systems and trading rules.

The short-term rise and fall of the sector/fund is only used as auxiliary material for the analysis and views of the article, and is for reference only and does not constitute a guarantee of the performance of the fund.

The short-term performance of individual stocks mentioned in the article is for reference only and does not constitute a stock recommendation, nor does it constitute a prediction or guarantee of the performance of the fund.

The above views are for reference only and do not constitute investment advice or commitment. If you need to purchase relevant fund products, please pay attention to the relevant regulations on investor suitability management, do a good risk assessment in advance, and purchase fund products with the corresponding risk level according to your own risk tolerance. Funds are risky and should be invested with caution.

National Business Daily

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