A-shares soared, what happened?

Xiaobai reads finance and economics

2024-05-17 16:44Published in Guangdong

The three major indexes all rose more than 1% on Friday, with the Shanghai Composite Index up 1.01%, the Shenzhen Composite Index up 1.1%, and the ChiNext Index up 1.12%.          

On April 25, A-shares resumed their rally after a sideways trade. I think a large part of the reason is that there has been a significant change in real estate policy.

This Friday, a series of blockbuster real estate policies were released: 1. The minimum down payment ratio for the first house was reduced to 15%, and the second set was reduced to 25%. 2. The interest rate of personal housing provident fund loans will be reduced by 0.25 percentage points, and the interest rates of the first set of personal housing provident fund loans for less than 5 years (including 5 years) and more than 5 years will be reduced to 2.35% and 2.85% respectively. 3. Abolish the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level. 4. In cities with a large inventory of commercial housing, the government may purchase part of the commercial housing at a reasonable price as appropriate.

These four policies are very strong, especially the fourth, which will have a significant effect on the recovery of the property market, especially the return of developers' funds.

The real estate sector has risen very well in recent times. This Friday, Vanke A also rose again. The recent rally in the property sector has also contributed to the broader market rally.

On the whole, the recent A-shares have been much stronger, and the market is expected to rebound a lot, which boils down to three words: real estate!

As I said, A-shares and real estate are now in a relationship of coexistence and co-prosperity, real estate is equivalent to the foundation of a house, and A-shares are like buildings on the foundation. If A-shares want to rebound, the premise must be that A-shares are stable.

The recovery of real estate is related to stable growth and employment, and is related to the property income of hundreds of millions of people.    

With the advent of a wave of favorable policies for A-shares, it is very likely that A-shares will continue to rebound by 200 points. However, at 3500 points, it is likely to face greater resistance, one is that there are too many arbitrage and hedge orders above. Second, there are too many uncertainties in the international situation this year, and there may be a black swan in the US election at any time, and the closer to the end of the year, the heavier the market's wait-and-see sentiment, so there is room for a rebound in A-shares, but there is a high degree of uncertainty in the rebound.    

View original image 197K

•