CITIC Securities research report that, since last week, the policy, economic, exchange rate and geo-environmental expectations of the overall rapid improvement of the market from emotional panic trading, shifting to a game based on the policy expectations of the trading, comprehensive restoration of the market on the right side of the buy point has been confirmed, the pace of steady and sustained, the configuration of continue to focus on the elasticity. On the one hand, from the perspective of several previous constraints, policy, "twenty" after the intensive statement of the ministries and commissions, the specific policy picture is more detailed and clear; economic, anti-epidemic initiatives continue to refine the more precise, the future of economic repair can be expected; exchange rate, the RMB to the Federal Reserve to raise interest rates desensitization, capital outflow concerns quickly alleviated; geo-referenced, the recent intensive diplomatic contacts release the right side of the buy point of the comprehensive repair market has been confirmed, the rhythm of steady and continuous, configuration continue to focus on flexibility. On the exchange rate, the RMB is desensitized to the Fed's interest rate hike, and capital outflow concerns are rapidly easing; on the geopolitical front, recent intensive diplomatic contacts have released positive signals, and the geopolitical environment is expected to improve rapidly. On the other hand, from the point of view of investor behavioral characteristics, northward capital outflow trend reversal, active private position since October continued to remain low, the market presents the characteristics of the active capital pricing, private equity positions and trading foreign capital reflux is an important marginal force, the market is currently in the policy-driven comprehensive restoration of the market in the first half of the market, is expected to fundamentals and valuation switching-driven market will be in the second half of the relay.
The full research report: policy-driven comprehensive repair market steadily continuedSince last week, the policy, economic, exchange rate and geo-environmental expectations of the overall rapid improvement in the market from emotional panic trading, shifting to the game based on policy expectations of the trading, comprehensive repair of the market on the right side of the buy point has been confirmed, the pace of steady and sustained, the configuration of continue to focus on the resilience of the. On the one hand, from the perspective of several previous constraints, policy, "twenty" after the intensive statement of the ministries and commissions, the specific policy picture is more detailed and clear; economic, anti-epidemic initiatives continue to refine the more precise, the future of economic repair can be expected; exchange rate, the RMB to the Federal Reserve to raise interest rates desensitization, capital outflow concerns quickly alleviated; geo-referenced, the recent intensive diplomatic contacts release the right side of the buy point of the comprehensive repair market has been confirmed, the rhythm of steady and continuous, configuration continue to focus on flexibility. On the exchange rate, the RMB is desensitized to the Fed's interest rate hike, and capital outflow concerns are rapidly easing; on the geopolitical front, recent intensive diplomatic contacts have released positive signals, and the geopolitical environment is expected to improve rapidly. On the other hand, from the point of view of investors' behavioral characteristics, the northward capital outflow trend reversal, active private positions in October since the continued low, the market presents the characteristics of the active capital pricing, private equity positions and trading foreign capital reflux is an important marginal force, the market is currently in the policy-driven comprehensive restoration of the market in the first half of the market, is expected to fundamentals and valuation of the switch-driven market will be in the second half of the relay.
Since last week, policy, economic, exchange rateand geopolitical environment is expected to improve rapidly across the board
1) "twenty" after the intensive statement of the ministries and commissions, the specific policy landscape More detailed and clearer. November 4, Vice Premier Liu He published a signed article in the People's Daily, proposing the implementation of the strategy of expanding domestic demand and deepening the supply-side structural reforms organically combined, put forward seven major focus points. Various ministries and commissions have also given specific directions of work and reform in response to the guidelines of the "Twentieth National Congress". Minister of Finance Liu Kun published an op-ed entitled "Improving the Modern Budget System", which clearly defined the key initiatives to further deepen the reform of the fiscal and taxation system. One line and two chambers gave clear guidelines on improving the policy system, maintaining currency stability, promoting economic growth, capital market service for high-quality development, high-level scientific and technological self-reliance, and preventing and resolving major financial risks. The NDRC emphasized the in-depth implementation of the innovation-driven development strategy, the construction of a modernized industrial system, and the steady promotion of the "dual carbon" as well as ensuring the security of food, energy resources, and the supply chain of important industrial chains. The Ministry of Commerce clearly put forward the internal efforts to expand domestic demand, promote the construction of a modern circulation system, and enhance the fundamental role of consumption in economic development, and the external efforts to promote a high level of opening up to the outside world, and accelerate the construction of a strong trading nation. Ministries and commissions in the "20th Congress" after the study statement fully reflects "development is the party's first priority for the country, the focus of economic development in the real economy".
2)The anti-epidemic measures have been refined and more precise, the future economic repair can be expected. November 5, the State Council Joint Prevention and Control Mechanism held a press conference on the theme of "scientific and accurate prevention and control of epidemics", highlighting the issue of scientific and accurate prevention and control of epidemics, and requesting to improve the level of scientific and accurate prevention and control, to prevent simplification, one-size-fits-all, and resolutely rectify the layers of code. Recently, many parts of the country have made amendments to the epidemic prevention and control policy, and strive to be more scientific and precise, to avoid indiscriminate control and restriction. For example, Inner Mongolia emphasized that "can not be indiscriminate and endless control and restriction, so that the city gradually rejuvenate", Henan emphasized that "should be scientifically and accurately delineate the risk area, not because there is an individual epidemic 'ignition point' on the long-term The city should be allowed to gradually regain its vitality", and Gansu emphasized that "epidemic prevention and control should not be simplified, one-size-fits-all, and layered". Epidemic prevention policy to amend the actual landing level, around the frequency of nucleic acid, airports and railway stations to check, the precise division of risk areas and other aspects of intensive adjustment. Overall, as the epidemic prevention initiatives continue to refine and accurate, the negative impact of the recent epidemic on the economy is expected to ease the future economic repair can be expected.
3) RMB is desensitized to the Fed's interest rate hike, and capital outflow concerns are rapidly easing. Although this FOMC meeting shows that the Fed continues to remain hawkish, but the future path map of interest rate hikes has become clearer, CITIC Securities Research Department of the Overseas Macro Group is expected to slow down the probability of interest rate hikes in December to 50bps, the end of the round of interest rate hikes may be more than 5% in the end of the height. The Fed rate hike meeting did not lead to a renewed depreciation of the RMB exchange rate, the U.S. and Chinese stock markets since October to end the same direction of fluctuations, the RMB exchange rate and the A-share is now more dependent on the market's expectations of China's economy rather than the Fed's actions. Allocative foreign capital ended the phase of rapid net outflows, November 1 to 4 cumulative net inflows of 3.34 billion yuan, worried about capital outflows quickly eased. From the U.S. and China's economic cycle is located in the position, China's high probability in the fourth quarter of this year, the economy appeared gradually improved trend, the end of the downward cycle that lasted more than a year, while the United States in order to clear the obvious supply and demand imbalance in the labor market and curb inflation, may need to continue to raise interest rates until the recession. China and the U.S. economy early next year, the probability of another cycle of dislocation, China up the U.S. down, this round of yuan exchange rate depreciation trend has basically ended.
4) Recent intensive diplomatic contacts have released positive signals, and the geopolitical environment is expected to improve rapidly. "Twenty" after the party and state leaders and dignitaries have frequent contact. November 4, German Chancellor Scholz led a group of business leaders to visit China, to a large extent, to dispel the Russian-Ukrainian conflict after the market for the European Union to decouple the anxiety. In addition, the diplomatic contacts after the 20th National Congress show that China's cooperation and exchanges with countries along the "Belt and Road" are getting closer and closer. 2023 will mark the 10th anniversary of the "Belt and Road" strategy, and China's cooperation with countries along the route will be more and more intense. In 2023, the 10th anniversary of the "Belt and Road" strategy, China can look forward to closer cooperation and economic construction with the countries along the route.
Markets have shifted from emotional panic trading to gaming trading based on policy expectations
1) The trend of outflows of funds from the north has been reversed, and the position of private equity has been maintained at a low level since October. November northward funds accumulated net inflow of 4 billion yuan, of which 3.3 billion yuan of allocation funds, reversing the previous nearly two months of sustained net outflow trend. The marginal pricing influence of foreign capital on its major trading stocks has begun to weaken significantly in the near future. In the first four trading days of November, the percentage of total trading and the percentage of selling trading of foreign capital were 12.9% and 6.6%, respectively, sliding by 3.1 and 2.4 percentage points compared with October, which has dropped to the level before September. According to the statistics of private placement network, the position distribution of private placement products as a whole continued to maintain a medium-low position in October, and the proportion of private placement products with a position of over 80% in October was 59%, which slipped by more than 20 percentage points compared with that in August.
2) The market showed active capital pricing, with private equity position increases and the return of traded foreign capital as important marginal forces. At the end of the third quarter, the position of active public equity among common stocks, biased mixed, flexible allocation type was 89.0%, 86.7% and 72.5%, respectively, the overall position is still at a medium-high level. According to CITIC Securities Research Department quantitative group calculations, the end of the third quarter so far, the above three types of funds position cumulative change +0.63, -0.04 and +1.06 percentage points, did not drop position. The public offering of new funds remains sluggish, the issuance of equity products in October was only 17.6 billion yuan, down 50.1% from September, of which 13.1 billion yuan of active products, only 55.2% of the size of the September issue. The future of the market's short-term incremental funds more from the active private equity positions and trading foreign capital back to the flow. According to CITIC Securities channel research data, the active private placement position has been maintained for three consecutive weeks in 68% of the history of the low level, from the end of April this year, the position of only 3 to 4 percentage points. The economic rebound is expected to catalyze the return of the north of the trading foreign capital, from the historical pattern, the economic expectations of a rapid rebound in the stage, trading funds can be in a single quarter of a rapid net inflow of 60 ~ 80 billion yuan, but also an important marginal force affecting the market.
3) The current market is in a game-like trading phase based on policy expectations. A stock 2022 three-quarter report aspects of the continuation of the bottom of the midterm report features, and a slight decline, from the current high-frequency economic data and part of the industry research situation, the fourth quarter whether there can be a significant improvement in the ring is still a high degree of uncertainty. At this stage, it is still difficult for investors to drive investment and allocation based on the logic of the fundamentals, the year-end central economic work conference to set the tone, the two sessions in early March next year, as well as the possible adjustment of the subsequent anti-epidemic policy, are all events that need to be observed. In addition, in terms of market liquidity, active capital pricing environment is characterized by obvious, under the premise of valuation and position double low, market participants are more happy to game around the policy expectations, medical new infrastructure in late September (medical equipment and devices), October's autonomy (semiconductors + Xintronics), as well as the November game of the epidemic control relaxation, are based on the forward expectations of the rapid rotation of the short-term transactions.
Comprehensive restoration of the right side of the market buying point has been confirmed, the rhythm of the steady continuation
Since last week, policy, economic, exchange rate and geo-environmental expectations of the rapid improvement of the full round of comprehensive restoration of the market is expected to continue for several months of the right side of the buying point has been confirmed. The current market is still in the early half of the first half of the policy is expected to trade driven, the market is expected to continue steadily on the rhythm, configuration focus on policy catalysts, valuation of flexible varieties, fundamentals and valuation switch driven market is expected to take over in the second half. Specific varieties of choice, it is recommended to pay attention to: ① growth in the field of manufacturing focus on the previous sustained adjustment, next year there is valuation switching space semiconductor and military among the white horse leader in the external science and technology sanctions continue to intensify the environment of the field of independent controllable Intron, and labeling attributes. strong>, as well as labeling attributes are weaker, valuation of cost-effective still higher new chemical materials. (②Pharmaceutical industry focus on Chinese medicine with a high price-performance ratio, benefiting from the new medical infrastructure medical equipment, benefiting from the subsidized loan policy Research Instruments, as well as to fully digest the valuation and policy concerns Medical Devices and Medical Instruments. strong>and services. (iii) The vocational education sector, driven by the policy of prioritizing people's livelihood and employment after the 20th National Congress.
Risk Factors
Repeated localized epidemics exceeding expectations; intensified friction between China and the U.S. in the areas of science and technology trade and finance; domestic policies and economic recovery progressing less than expected; domestic and international macro-liquidity tightening beyond expectations; and further escalation of the Russia-Ukraine conflict.