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Reporter of China Business Network: Xiao Ruidong Editor of China Business Network: Zhao Yun

On August 13, the market rebounded throughout the day, and the three major indexes all rose slightly. As of the close, the Shanghai Composite Index rose 0.34%, the Shenzhen Component Index rose 0.43%, and the ChiNext Index rose 0.93%.

In terms of sectors, civil explosives, oil and gas, MR, securities and other sectors had the largest gains, while new crown drugs, liquor, traditional Chinese medicine, and pharmaceutical commerce sectors had the largest losses.

Overall, more stocks rose than fell, with more than 3,700 stocks rising in the entire market. The turnover of the Shanghai and Shenzhen stock markets today was 477.3 billion, down 18.6 billion from the previous trading day, hitting a new low since December 24, 2019.

From last Friday to today (August 13), the trading volume of A-shares has continued to shrink, reaching a new low every day.

Optimistically speaking, as the land volume is repeatedly refreshed, the probability of the overall market confirming the "land price" is increasing.

As shown in the figure, the low points of the Wind All A Index on July 9 and July 25 were roughly at the lower edge of the same box; at the end of today's trading, the major indexes rebounded in large volumes and recorded lower shadows.

The situation of the average stock price of all A-shares is similar.

In other words, as trading activity decreases, more and more stocks are entering a state of "no longer falling".

When "now is the bottom" becomes a consensus, a rebound is imminent.

Considering that today's transaction volume hit a new low, this article mainly discusses one issue:

Can A-share trading volume go any lower?

In yesterday’s push, we mentioned that the low point of the A-share transaction volume in recent years was 482.505 billion yuan on May 25, 2020.

Until today's closing of 479.9 billion, it once again set a new lower limit.

I believe many people will have two questions:

1) Why is it so much lower?

2) Will there be a new low?

In fact, the above question can be better answered from the perspective of turnover rate.

(Note: Just share the ideas for your reference)

By definition, turnover rate is the frequency with which securities are traded during a given trading day. As a ratio, it is more suitable for comparing the activity of the market at different times.

After all, in May 2020, there were only more than 3,800 A-listed companies; now there are more than 5,300. Many absolute indicators are not comparable.

Wind data shows thatMay 25, 2020On the day:

The turnover rate of the Shanghai Composite Index is0.46%；

The turnover rate of Wind All A Index is0.77%。

In the case of a transaction volume as low as 490 billion yuanyesterdayAugust 12:

The turnover rate of the Shanghai Composite Index is0.52%；

The turnover rate of Wind All A Index is0.85%。

andtodayBy the close, the data was a little lower:

The turnover rate of the Shanghai Composite Index is0.51%；

The turnover rate of Wind All A Index is0.79%。

This shows that in terms of trading activity, the current market can be considered close to the bottom, but it cannot be called the "historical bottom". After all, from the second half of 2018 to the beginning of 2019, the turnover rate of the Shanghai Composite Index was continuously below 0.4%.

For example, on December 11, 2018, the turnover rate of the Shanghai Composite Index was only 0.3%, while that of the Wind A-Shares was 0.55%.

If other conditions remain unchanged, the turnover rate will continue to approach the "historical bottom" of 0.3% from the "small bottom" of 0.5%, which means that the transaction volume still has room to decline.

But as the article states at the beginning:

1) When the market is “unable to fall”, the market fluctuations will not be too large;

2) The closer to the bottom, the greater the probability of a short-term rebound.

Therefore, even if the transaction volume continues to hit new lows in the future, we can look at it rationally.

Which sectors were rotated today?

Yesterday’s strong COVID-19 concept sector failed to sustain today. I believe many investors expected this.

Under the background of rotation, what themes have been discovered by funds today?

1) Concept of civil explosives

As of closing, the sector rose by more than 3.6%, ranking first in the entire market.

Logically speaking, the concept of civil explosives is more like a continuation of yesterday's environmental protection sector. The main reasons are:

The "Opinions on Accelerating the Comprehensive Green Transformation of Economic and Social Development", which has been a hot topic recently, clearly emphasized for the first time the need to accelerate hydropower construction in the southwest.

Some people believe that the construction of hydropower stations and supporting roads, bridges, tunnel excavation and other projects all require explosives and related services, and that civil explosives are often at the front end of the project and will benefit first.

2) Oil and gas sector

On the news front, international oil prices surged more than 3% on Monday, rising for the fifth consecutive trading day as the market expected that escalating conflict in the Middle East could lead to tight global crude oil supplies.

Global benchmark Brent crude futures closed at $82.30 a barrel, up $2.64, or 3.3%, marking the biggest one-day gain this year, while U.S. WTI crude futures closed at $80.06 a barrel, up $3.22, or 4.2%.

Everbright SecuritiesIt is pointed out that geopolitical risks and strong supply and demand fundamentals are expected to cause oil prices to fluctuate at high levels. In the short term, commodity prices will fluctuate sharply under high geopolitical risk environment.

In the long run, the research report points out that supply and demand factors still dominate the pricing system of commodities, and geopolitical factors resonate with supply and demand factors. The United States has entered the peak season for gasoline consumption in the summer. Gasoline consumption in the traditional peak season has increased significantly, and there is a clear trend of crude oil destocking. Although the IEA is bearish on the medium- and long-term demand for crude oil, driven by peak season consumption, crude oil demand in the third quarter is still strong, and global crude oil supply and demand is expected to tighten. According to EIA's forecast, the supply and demand gap in the third and fourth quarters of 2024 will be 880,000 and 660,000 barrels per day, respectively. Under the combined effect of geopolitical risks and strong fundamentals of oil prices, oil prices are expected to remain volatile at high levels.

3) Consumer electronics

On the news front, according to media reports, technology journalist Gurman said,appleDeveloping smart glasses and the second-generation Vision Pro. In addition, Apple is continuing to develop the second-generation Vision Pro, but the release date has not yet been determined.

The recent launch of a number of smart glasses has also boosted the market's attention to the sector.

Some institutional research reports have previously made an inventory↓

It should be pointed out that among the above three sectors, consumer electronics has the lowest overall increase in recent times; the oil and gas sector has seen a continuous upward trend; and the civil explosives concept sector has been correcting for three consecutive days after a sharp rise last Wednesday (August 7), and only resumed its upward trend today.

Daily Economic News