2024-09-27
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editor's note: for some time now, affected by complex internal and external market factors, the a-share market has continued to be under pressure, making it difficult for resource allocation, value discovery, wealth management and investment functions to be fully utilized. no matter how the market evolves and develops, it always has its own laws. understanding history helps to discover the future. at the moment, broadening our horizons and thinking calmly will help us accurately grasp the historical position of the a-share market, clearly see the marginal improvement in the supply and demand relationship in the stock market, and wait for the series of measures to activate the market to gain momentum and bear fruit. the securities times launched a series of reports "discovering the investment value of a-shares". through in-depth interviews and data mining, it presents the positive changes taking place in the a-share market from multiple angles, with a view to building consensus, boosting confidence, and jointly pushing a-shares out of the downturn and onto a healthy path. prosperity and development track.
policy "gift packages" are constantly being delivered. after releasing a package of policies that exceeded expectations on september 24, the political bureau of the cpc central committee held a meeting on september 26 to make a series of arrangements for the next economic work.
the recent continuous introduction and increase of heavyweight policies have significantly benefited a-shares. how to judge the short- and medium-term impact of policies on the market? what aspects should be considered to improve the investment value of a shares? recently, securities times·brokerage china reporters conducted exclusive interviews with chief economists and strategists of a number of brokerages.
in their view, the valuation of a-shares is at a relatively low level in history. benefiting from the intensive introduction of favorable policies, market confidence is expected to be boosted, the relationship between supply and demand of funds in the stock market will be improved, and the value of medium and long-term investment will be highlighted. at the same time, interviewees also said that to further enhance the attractiveness of a-shares, macroeconomic policies are needed to boost the demand of the real economy, especially active fiscal policies.
regarding the stabilization funds that are currently attracting market attention, interviewees said that the establishment of funds can indeed effectively help the market get out of the trough period, but the key lies in the detailed planning and strict supervision of its design and implementation.
the a-share market may usher in a market recovery
"it is rare for the politburo meeting to analyze and study the economic situation in september, which reflects the importance that decision-makers attach to increasing macro-control and strengthening counter-cyclical adjustments," said yang fan, chief macro and policy analyst at citic securities. huang wentao, chief economist of citic construction investment, believes that this politburo meeting echoes the "financial support for high-quality development" press conference held on september 24 by the "one bank, one bureau and one meeting" and fully demonstrates the central government's commitment to stabilizing growth. the firm attitude has significantly boosted market expectations.
zhang jun, chief economist and director of the research institute of china galaxy securities, told reporters that with the introduction of this round of policies that exceed expectations, market confidence is expected to be effectively boosted, and the a-share market may usher in a recovery.
many interviewed brokerage chiefs also had similar views. in their view, the current valuation of the a-share market is at a historically low level, and the main reason for its lack of attractiveness is the disturbance of economic fundamentals and policy expectations. insufficient effective domestic demand was emphasized . chen guo, chief strategy officer of citic construction investment, also mentioned the impact of liquidity and risk premium factors. the former is mainly the u.s. dollar cycle and china's monetary policy's trade-off between exchange rate stability and achieving inflation targets, while the latter refers to the market's expectations for a balance sheet recession. can it be improved. the series of policies introduced since september 24 have injected vitality into a-shares by improving expectations and increasing liquidity.
xun yugen, chief economist and director of the research institute of haitong securities, mentioned that encouraging listed companies to repurchase and increase their holdings by increasing special re-loans will help reduce the volatility of the company's stock price in the long term. zhang jun believes that the entry of medium and long-term funds into the market and the optimization of m&a and reorganization policies will help stabilize market funds and improve the market structure, especially "long-term money and long-term investment", which will have a positive effect on improving the overall market valuation level. zhao wei, chief economist of shenwan hongyuan securities, mentioned that the first phase of swap facilities with a scale of 500 billion yuan will help patient capital support the market, thereby stabilizing market confidence and boosting risk appetite.
this politburo meeting once again released a positive signal, proposing that efforts should be made to boost the capital market, vigorously guide medium and long-term funds to enter the market, and open up the blocking points for social security, insurance, financial management and other funds to enter the market. guo lei, chief economist of gf securities, believes that this shows that the policy attaches great importance to the funding hub and expected guidance functions of the capital market. huang wentao analyzed that it is expected to inject more liquidity into the market, promote industrial integration, and improve market pricing efficiency.
look forward to incremental fiscal policy efforts
judging from market performance, thanks to multiple policies, the shanghai composite index returned to above 3,000 points on september 26. looking forward to the market outlook, zhao wei believes that in the short term, the market may rebound due to increased policy support and liquidity support from new tools. in the medium term, currency has exerted force, and the market focus will turn to the "continuation" of fiscal policy. the fiscal revenue and expenditure gap still exists during the year. the central government's financial resources are constrained by tax revenue and local governments are dragged down by land revenue. the increase in fiscal policy may further benefit the improvement of market risk appetite.
xun yugen also said that recent new policies can improve the supply and demand relationship of capital in the stock market, but the mid- to long-term trend of the market depends on fundamentals. he believes that we can continue to track the follow-up policies related to expanding domestic demand, especially fiscal policies. to completely reverse the current problem of insufficient demand, the central government needs to make efforts, and at least increase the proportion of central and local fiscal expenditures in gdp to the level before the epidemic. level, 5 trillion and above are needed to expand domestic demand, such as supporting real estate acquisition and storage, "two new" projects, etc.
it is worth mentioning that at this politburo meeting, there are signs of further increasing fiscal policy. the meeting mentioned that it is necessary to increase the counter-cyclical adjustment of fiscal and monetary policies, ensure necessary fiscal expenditures, and effectively do a good job in the "three guarantees" work at the grassroots level. it is necessary to issue and make good use of ultra-long-term special treasury bonds and local government special bonds to better play the driving role of government investment.
zhang jun analyzed that the additional issuance of ultra-long-term special treasury bonds may be used to further support consumption, especially service consumption; replenish the core tier one capital of six large commercial banks; and increase the construction of dual projects. in addition, general finance is still expected to increase, focusing on the restart or new establishment of policy financial instruments, which can be used for three major projects or to revitalize existing local assets. yang fan believes that the focus of subsequent fiscal policies may be tilted towards benefiting people's livelihood and promoting consumption. helping low- and middle-income groups and boosting the trend of consumption upgrading may be the focus.
stabilization funds also have high hopes
in addition to increasing fiscal expansion, zhao wei also suggested guiding the clearance of redundant production capacity, boosting capacity utilization from the supply side, smoothing the price transmission mechanism, and considering fiscal funds to relieve liquidity pressure on real estate companies. he said that by focusing on the core crux of the current real economy and promoting a significant improvement in economic expectations, market sentiment will naturally be boosted and the investment value of a-shares will be further highlighted.
zhang jun suggested improving market structures such as the main board, small and medium-sized boards, gem and science and technology innovation boards to provide more choices for different types of companies and investors; improve trading mechanisms, such as optimizing the price limit mechanism, improving trading efficiency, and introducing more flexible investment and risk management tools such as derivatives and options. chen guo suggested that clear expectation management should be provided for whether the property tax will be levied, and stabilization funds or other medium- and long-term funds should be established to announce that they will continue to increase holdings of a considerable amount of stock index funds and other equity assets.
in fact, since the central bank revealed on september 24 that it was studying stabilization funds, the market has been paying close attention to this. xun yugen told reporters that stabilization funds can guide the return of market value when the stock market is oversold and stabilize fluctuations when the stock market is overrising. at present, confidence in a-shares is still sluggish. you can consider setting up a stabilization fund. set an initial scale first, and the annual stamp duty income from securities transactions in the future can be supplemented into the stabilization fund.
other interviewees also put forward policy suggestions on the establishment of stabilization funds, among which the establishment of a strict governance structure, a complete information disclosure mechanism, and the adoption of sound investment strategies were emphasized. in addition, zhang jun believes that the objectives and mechanisms of the fund must be clarified, such as whether the source of funds is specific taxes, foreign exchange income or financial transaction charges. at the same time, it is necessary to regularly evaluate the operating effects of the fund and its impact on the economy, and adjust the fund's size, investment strategy and usage conditions when necessary. there is also a need to ensure that the fund has the flexibility to adapt to changes in the economic environment and emerging economic challenges.
zhao wei said that during the operation of stabilization funds, it is necessary to take into account the "intensity of intervention" and "protect market effectiveness", and grasp the "threshold" of intervention. the scale of intervention should neither be too low, resulting in limited stabilization effects, nor should the stabilization effect be limited. let the information about government intervention excessively disturb investors' decision-making, thereby damaging the pricing efficiency of the capital market. at the same time, the stabilization fund operation should implement the stabilization function based on the principle of "absorbing the lows and not chasing the highs" to promote the return of the underlying price to the value and avoid price distortion in the stabilization process.