Yang Delong: Historically, Hong Kong stocks tend to bottom out before A-shares, so stay confident and patiently waiting for the next round of bull market

This week, the A-share market has bottomed out and rebounded, and the market has fought a 2,900-point defense battle. After the market briefly fell below the 2,900-point mark, there was a Jedi counterattack, and the continuous rebound regained 2,900 points, which is not far from 3,000 points, and the market ushered in a short-term rebound. Towards the end of the year, the market's long and short divergence increased, which also led to a tug-of-war in the broader market near 3,000 points. There is still one trading week left in the market in 2023, and on the whole, the A-share market will see a significant decline in 2023, the market's money-making effect is poor, and many investors have lost money, but on the contrary, it has also laid a solid foundation for the layout of 2024. The current market trend is weak, on the one hand, the market in the market fell below 3000 points after the bulls' confidence was frustrated, resulting in a market shrinkage adjustment, on the other hand, near the end of the year, some investors cashed in advance of the year's earnings, but also appeared a certain profit-taking, after all, there are still a small number of sectors and stocks this year rose.

On the whole this year, the style of the market is biased towards theme stocks and concept stocks, and good companies with good performance have undergone a relatively large adjustment. Since the peak of many high-quality stocks in February 2021, the market has been adjusted for nearly three years, and the adjustment time has been relatively sufficient, and the so-called things are not more than three, and 2024 may usher in an excellent opportunity for recovery. Judging from the magnitude of the adjustment, many high-quality stocks are only three or four folds relative to the high stock price, and some are even lower, which is the best time window for a good company. Warren Buffett has always emphasized that to make strategic investments, we must be good shareholders of the company, do not treat stocks as stocks, but as a shareholder certificate, choose a good industry, a good company, and then wait patiently for a good price. The price of good companies is relatively high, only when the stock market crashes or when the market is in a long-term downturn, there will be a good price, and now is undoubtedly the time to generate a good price, so it is recommended that investors should overcome their fears, do not pay too much attention to short-term market fluctuations, and lay out high-quality stocks or high-quality funds that have been killed by mistake on dips. In 2024, the A-share market is equipped to launch a new bull market, and we are now standing at the beginning of a new bull market, so it is important to maintain confidence and patience in the present.

On November 21, the central bank held an expert forum on the economic and financial situation. Pan Gongsheng, governor of the central bank, presided over the symposium to study the current economic and financial situation and listen to relevant opinions and suggestions. Experts at the meeting believed that since the beginning of this year, a series of policy measures to expand domestic demand, boost confidence, and prevent and control risks have been introduced one after another, and the policy effect has gradually emerged. Financial support for the real economy has been stable, and the economy has generally rebounded. The experts at the meeting put forward opinions and suggestions on how to solve problems in economic and financial operations, prevent and resolve potential risks, balance internal and external balances, and strengthen macroeconomic policy coordination. Pan Gongsheng said that in the context of increasing external uncertainty, the resilience of the mainland foreign exchange market has been significantly enhanced, and the RMB exchange rate has remained basically stable at a reasonable and balanced level. The People's Bank of China has always adhered to the two unwavering, focusing on cultivating new momentum for development, promoting the private economy to become bigger, better and stronger, increasing the increment and proportion of loans in the fields of scientific and technological innovation, private small and micro enterprises, advanced manufacturing, and green development, and further increasing the intensity of financial services for the real economy. The symposium fully absorbed the opinions and suggestions of experts to maintain reasonable and sufficient liquidity. The scale of social financing and the money supply should match the expected targets of economic growth and price levels, and we should maintain a reasonable growth of credit at a steady pace and optimize the structure, so as to create a favorable monetary and financial environment for the sustained economic rebound and improvement. The symposium on the economic and financial situation convened by the central bank focused on the current macro issues. There are corresponding measures in the three major risk areas of resolving the property market, local bonds and small and medium-sized financial institutions. At present, the central bank still has a large policy toolbox, and is confident to solve some of the macro problems facing the current economy, which is also conducive to dispelling investors' worries and promoting the capital market to stabilize and rebound.

Recently, there has been a large number of subscriptions for broad-based indexes, which have become new funds in the market. As of December 19, the share of ETFs in the whole market hit a record high, totaling 2.01 trillion shares, an increase of 39% from the share at the beginning of this year, of which 1,368 billion shares were currency-based. In terms of the number of products, equity ETFs occupy the lion's share. In the past two years, industry-themed ETFs and broad-based index ETFs have exploded in the past two years, and they are still the mainstream of the ETF market. Specifically, among the equity ETFs, thematic index ETFs and scale index ETFs occupy an absolute number advantage, and some are industry index ETFs and strategy index ETFs. Compared with the competitive landscape in previous years, when the track was king, in 2023, broad-based ETFs will overtake their status in one fell swoop and become the hottest bait in the issuance market this year. The rapid development of public broad-based index products has provided more incremental funds to the capital market. Broad-based index has the characteristics of risk diversification and low industry concentration, suitable for the layout of multiple types of investors, especially in the current market in the historical bottom area, many institutional investors through the dip layout of the broad-based index ETF to achieve the bottom of the regional layout, December 6 issued the "National Social Security Fund Domestic Investment Management Measures (Draft for Comments)" also shows the future role of the social security fund. With the inclusion of stock index investment and ETF funds in the direct investment scope of social security funds, the scale of ETFs will continue to grow. At the same time, the public, investment advisors and other institutional investors have become an important force in providing liquidity in the ETF market. These are beneficial for the A-share market to absorb more incremental funds.

The market has gradually bottomed out recently, and while we can't predict the short-term trend, the so-called vague right outweighs the precise error. Historically, the A-share market and the Hong Kong stock market have not diverged much in the bottom area. The Hong Kong stock market has repeatedly peaked at the end of the bull market and bottomed out at the end of the bear market than the A-shares. At present, Hong Kong stocks have bottomed out and rebounded for ten trading days in advance, which may be an important example of the A-share market bottoming out. In the medium and long term, it is the best investment strategy to wait patiently for the next round of market to arrive by laying out high-quality stocks or high-quality funds on dips, because in the long run, the stock price of a good company will achieve a return of value, and it is only a matter of time before the stock price hits a new high. (The views are for reference, investment needs to be cautious, source: Internet)