What is the difference between the "national team" entering the market for the third time in the year?
Text: Wang Mao, senior editor of Tsinghua Financial Review
The Beijing Stock Exchange is estimated to be ebbing, what is the reason for this "outbreak" of the market? This past Friday, the "national team" bailed out the market for the third time this year, what is the difference this time? What are the key factors affecting the trend of A-shares?
The reason for this wave of "market" on the Beijing Stock Exchange
In mid-to-late November 2023, the Beijing Stock Exchange, which had been silent for a long time, suddenly broke out in the "market". On November 21, the Beijing Stock Exchange 50 Index soared nearly 12% intraday. Behind the rare surge, there is an unconfirmed news, that is, brokerages are required to open accounts on the Beijing Stock Exchange to reach 80%.
Under such a high KPI requirement, the brokerage must use all the solutions, and all kinds of funds will arrive quickly, and it will be difficult for the Beijing Stock Exchange to rise sharply. The funds in the A-share market are relatively stable, and they have run to the Beijing Stock Exchange, and the main board has "lost blood" and has insufficient liquidity, which is one of the reasons for the poor performance of A-shares in the second half of November.
Is the sharp rise in the Beijing Stock Exchange due to the sharp improvement in the performance of the listed companies in it? The answer is no, this is another "short-term speculation" under the "favorable policy." For those who have been staying up on the Beijing Stock Exchange, this time it is "manna from the sky", they can do fast in and out, and they can also get a piece of the pie, and those who move slowly for half a beat are estimated to stand guard at a high place.
Those who "stand guard from a high place" also know that there is such a risk, but they always have a fluke mentality, and they will never be the last stick in the game of "beating the drum and passing the flowers"? This is human nature, as ancient as a mountain.
The "market" of the Beijing Stock Exchange is estimated to be about to recede, and it is a good thing that funds return to the main board, and the top management resolutely defends the 3,000-point mark of the Shanghai Composite Index, and the market outlook is also worth looking forward to.
The "national team" rescued the market for the third time in the year
This past Friday, the market was quite weak in the morning, and the bulls seemed to be disarming without resistance, and the 3,000-point defense battle was about to start again. Unexpectedly, the market received a strong pull in the afternoon, with the Shanghai Composite Index closing in the red and the ChiNext Index also rising
The reason is that some state-owned capital operating companies went against the norm on Friday afternoon and entered the market in a high-profile manner, buying ETF products of a number of public fund companies. It is reported that most of the ETFs bought are products that track the index of central enterprises. Judging from the intraday fund trading on Friday, the turnover of a number of central enterprise index ETFs has increased significantly.
This is what we know, the "national team" entered the market for the third time this year. The first time was on October 11, when Central Huijin entered the market to buy shares of the four major banks, and also said that it would continue to increase its holdings in six months. The second time was on October 23, and Huijin also announced in the evening after the operation that it had bought a broad-based ETF in the secondary market. The third time was just this past Friday (December 1), I bought an ETF with the theme of "medium and special valuation" to support the market.
And this third bailout has a significant difference from the previous two, that is, the unusually high-profile, "widely announced" at half past one on Friday afternoon, as if hoping that everyone will know that the "national team" has made a move. The first two bailouts were "quietly", and after the bailouts, the news was released in the evening after the market closed.
How to see how A-shares will go next depends on these four points
Now that we have entered the last month of 2023, what will be the performance of A-shares, or what factors need to be observed to predict the performance of A-shares?
As mentioned in the previous article, we can observe the performance of the mainland economy, the direction of the Federal Reserve's monetary policy, the economic and financial policies that exceed expectations, and the changes in international relations.
First, look at the mainland's economic situation. The latest data released by the National Bureau of Statistics on November 30 showed that the manufacturing purchasing managers' index (PMI) was 49.4% in November, down 0.1 percentage points from the previous month. This suggests that the index not only continues to be below the 50% of the boom and bust point, but is also below the level of the previous month, suggesting that it will take some time for the economy to truly recover.
Source: National Bureau of Statistics
However, the situation is relatively complicated, and it is necessary to observe further: in terms of enterprise scale, the PMI of large enterprises was 50.5 percent, down 0.2 percentage points from the previous month and continued to be higher than the critical point; the PMI of medium-sized enterprises was 48.8 percent, up 0.1 percentage points from the previous month, below the critical point; and the PMI of small enterprises was 47.8 percent, down 0.1 percentage points from the previous month, below the critical point.
This clearly shows that although the economic growth rate of large enterprises has slowed down, it continues to be in the expansion stage, although medium-sized enterprises are still shrinking, but the degree has decreased, and the situation of small enterprises is relatively bleak, not only shrinking, but also deepening. With the introduction, implementation and play a role in more policies, it is believed that the economy can stabilize and rebound steadily.
Second, look at the direction of the Fed's interest rate policy. The Federal Reserve has one more interest rate meeting for the rest of 2023, which is from December 13 to 14, Beijing time, and it seems that it is highly likely that the Fed will keep its benchmark interest rate unchanged. This is a positive.
The Fed started its current rate hike cycle in March 2022 and has raised interest rates 11 times so far, totaling 525 basis points, and the benchmark federal funds rate has risen to a range of 5.25%-5.5%.
Third, we will see whether there are any further economic and financial policies that exceed expectations. Friday's "national team" came to the rescue in an unexpected way, which is also a positive sign.
Fourth, looking at international relations, geopolitical conflicts are evolving. At least Sino-US relations have eased and warmed up, which is also a positive sign.
At present, there are still many positive signals.
This article is edited by Wang Mao
Preliminary trial丨Xu Lanying
Final Review丨Zhang Wei