Signal: RMB assets, the inflection point is coming?

Xiaobai reads finance and economics

2024-06-13 11:38Published in Guangdong

1. The RMB fell, and A-shares met the test of 3,000 points

On the first trading day after the Dragon Boat Festival, the onshore and offshore RMB exchange rates fell below the 7.25 and 7.27 marks respectively, and the RMB exchange rate against the US dollar once again faced depreciation pressure.

This wave of RMB depreciation began on May 6, and A-shares began to adjust shortly after, and now A-shares have pulled back to around 3,000 points, testing the support of 3,000 points again. From this, we can see that the RMB exchange rate is often the leading indicator of A-shares, and when the RMB exchange rate falls, A-shares will most likely adjust.

Why?

1. A-shares are important RMB assets, and a decline in RMB often means a decline in the price of RMB assets.

2. The decline of RMB has had a great impact on the sentiment of A-shares, and the enthusiasm for hot money to flow into A-shares has also declined.

In addition to the Fed's monetary policy still tightening, the current round of RMB depreciation is also due to the fact that interest rates in China's domestic market are still falling and the yield spread between China and US government bonds continues to invert.

On June 11, the front page article of the Securities Times pointed out that it has been a period of time since the last round of deposit interest rate cuts, and the need for deposit interest rate cuts continues to strengthen as the downward trend of net interest margins continues.

Therefore, there are two characteristics of A-shares at present: first, A-shares around 3,000 points are mainly defensive, sticking to the base camp and preparing for future attacks, which is also an opportunity for the low-volatility medium and special valuation sector. Second, the new "National Nine Articles" policy continues to be powerful, and more and more non-compliant stocks are sounding the alarm of delisting. As of June 10, 2024, 12 listed companies have completed delisting this year. However, the stocks of central state-owned enterprises with state-owned assets and stable finances will become a safe haven. Second, interest rates continue to fall, and stock opportunities with high dividend rates appear. The reason is very simple, many central state-owned enterprises have a dividend yield of 6%, when the deposit interest rate is getting lower and lower, even to 1%, is it more attractive to buy state-owned enterprise stocks to get dividends than deposits?

Many people say that the dividend yield of central state-owned enterprises is high, but the stock price will fluctuate, be unstable, and may lose the principal. But the volatility of large-cap blue-chip stocks is inherently low. Since 2016, the volatility of the CSI 300 has been about 18%, and the CSI All-Share Index has been around 19%, which is much lower than that of small and medium-sized enterprises.

If you break it down a little more, the dividend state-owned enterprise ETF (510720) that has been more popular in the market recently. The SSE State-owned Enterprises Dividend Index tracked by this product has performed extremely well in terms of both yield and stability. Since 2016, volatility has been between 16% and 17%, outperforming the CSI 300 and the CSI All Index.

In the past three years, the secondary market of the Shanghai State-owned Enterprises Dividend Index has risen by 36%, while the performance of the CSI 300 Index and the Shanghai Composite Index has been close to -29.78% and the Shanghai Composite Index has been -11.03% in the same period, which is already very good.

The main reason is that the SSE state-owned enterprise dividend has the dual blessing of dividends and state-owned enterprises, and the constituent stocks are all state-owned enterprise leaders, and the dividend yield is also higher than the general dividend index, and the dividend yield can reach 6.76% in the past 12 months. Under the background of the new nine articles, state-owned enterprises + dividends are still expected to continue to remain strong.

It is worth mentioning that the dividend state-owned enterprise ETF can pay dividends every month, up to 12 times a year, and it has been distributed once in the first month of listing in May. On June 11, the second dividend was announced, and the cash dividend payment date was June 18.

Second, the property market policy is in force, and the stabilization of the property market is the guarantee for the rebound of A-shares

The National Standing Committee on June 7 mentioned that it would continue to study new policy measures to reserve new destocking and stabilize the market. For the digestion and revitalization of the stock of real estate and land, we must not only emancipate our minds and broaden our thinking, but also grasp them steadily and make solid progress.

For the property market rarely mentioned "destocking", at the same time there are many new proposals, it is foreseeable that the property market will have a bigger policy in the future, as long as the property market does not stabilize, the property market policy may continue to increase.

In fact, the property market transaction volume in first-tier cities has shown positive signs, and it is possible to stabilize by the end of the year.

Both the stock market and the property market are important RMB assets, and they are in a relationship of coexistence and prosperity. Real estate not only affects stable growth and employment, but also affects residents' investment and consumption. The rebound of the stock market must be accompanied by the stabilization of the property market. Therefore, at present, favorable policies for the property market continue to appear, which are not only beneficial to the property market, but also to the stock market. When the property market stabilizes, the A-share rebound is often not absent.  

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