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the market is hot, but there are changes!

in early trading today, a-shares and hong kong stocks opened sharply higher, and the market became hot again. however, fifteen minutes after the market opened, large-cap dividend stocks suddenly fell. agricultural bank of china and yangtze electric power once fell by more than 3%. dividend assets such as sinopec and industrial and commercial bank of china also fell sharply. so, what happened?

analysts believe that from the perspective of the overall strategic direction, going long is still an important trend. however, since some funds that make absolute returns have been deeply involved in the above-mentioned dividend assets, and these stocks have been at high levels, it is relatively normal for high-low switching to occur. on the contrary, the withdrawal of funds from these large stocks may bring more increments to small and mid-cap stocks.

mutation

in early trading, a-shares strengthened again, but there were new changes in the market. today, dividend-heavy stocks fell very hard, and the index was once pulled back, but small and medium-cap stocks rose sharply. the chinext index once rose by more than 6%, and the turnover of the shanghai, shenzhen and beijing markets in the first 15 minutes of opening was nearly 400 billion yuan, 210 billion yuan higher than yesterday's volume.

in fact, the market may be experiencing a short squeeze. since the heavyweight stocks in the dividend index had previously been at high levels, their gains in this round of market prices could not be compared with those of small and mid-cap stocks. therefore, some absolute return funds fled from these stocks and moved to growth stocks.

judging from the balance of margin financing and financing, with the long holiday approaching, many people do not dare to leverage. however, under the background of yesterday's sharp rise, many people began to passively increase leverage. as of september 26, the financing balance of the shanghai stock exchange was 716.84 billion yuan, an increase of 887 million yuan from the previous trading day; the financing balance of the shenzhen stock exchange was 648.373 billion yuan, an increase of 2.769 billion yuan from the previous trading day; the two cities totaled 1,365.213 billion yuan, an increase of 3.656 billion yuan compared with the previous trading day.

chen guo of citic construction investment strategy believes that the main contradiction of current a-shares is no longer financial, nor is it a matter of fundamental verification. it’s about funding and supply and demand. judging from the situation learned in the past few days, the short-term increase in domestic capital is not clear, and they are hesitant to cash out, but foreign capital will cover a shares. since 2022, a-shares have had a group of foreign capital follow up on the right side. currently, the federal reserve is cutting interest rates. in the short term, foreign capital inflows cannot be ruled out exceeding expectations. objectively speaking, after 3,000 points, it will become more and more difficult to grasp short-term tactics, but the strategic direction is extremely clear: i believe that the strategy is to go long china's high-quality assets.

enthusiastic

currently, the market is enthusiastic. late last night, the citic securities wechat official account published a very rare article titled "qian". the title was very short, but it fully demonstrated the current high emotions and enthusiastic market conditions. the article pointed out that the word "qian" takes the lead and unites as one. believe in your country and believe in yourself. in fact, every ordinary person is the backbone of china. taking responsibility and forging ahead are the most pragmatic feelings of the chinese people towards their family and country.

reports early yesterday morning stated that the responsible comrade of the policy research office of the national development and reform commission stated that it is necessary to coordinate the implementation of existing policies and incremental policies, on the one hand, speed up the implementation of existing policies and measures, and intensify the promotion of "double" construction and "two new" work, form faster and more physical workload, expand domestic effective demand with a focus on boosting consumption, increase precise support for real enterprises, prevent and resolve risks in key areas to effectively ensure and improve people's livelihood; on the other hand, anchor the annual expected goals , focusing on business entities and social concerns, accelerating the introduction and implementation of incremental policies that are targeted and with obvious results, and using a combination of punches to stimulate enthusiasm, initiative, and creativity in promoting high-quality development, promote continued economic recovery, and complete the overall year target tasks.

the market is often dominated by activists. after the introduction of favorable policies, some banks have issued the "notice on marketing and promotion of special loan business for stock repurchases and increases" overnight. the notice requires that priority be given to supporting customers included in the bank's whitelist of listed companies; for stock increase loans prioritize intervention in businesses with stable market value, active secondary market transactions and good liquidity, and stocks included in the csi 300, csi 500 and other indices; prudently intervene in listed companies and their shareholders whose shares are too high in external pledge ratios and where dividends are not up to standard stocks that are restricted from reducing holdings under circumstances such as net loss, net loss, or issuance loss.

from the perspective of listed companies, muyuan shares has announced that the company plans to repurchase the company's shares for 3 billion to 4 billion yuan for employee stock ownership plans or equity incentive plans, with the repurchase price not exceeding 58.6 yuan per share. calculated based on the upper limit of the repurchase amount of 4 billion yuan and the upper limit of the repurchase price of 58.6 yuan per share, the number of shares repurchased is expected to be 68.26 million shares, accounting for 1.3% of the company's current total share capital.

buying frenzy

hedge fund billionaire david tepper said on thursday that there has been a "comprehensive shift" in chinese government policy over the past week, with "heavyweight" policies introduced to support economic growth. he added that he was buying "everything" he could buy that was tied to chinese stocks.

scott rubner, managing director of global markets at goldman sachs and a strategy expert, said on thursday that china's stock market has been strong in recent days. once the u.s. election is over, china's stock market should become an important part of investors' investment plans. rubner believes that the long-awaited recovery in china's stock market may finally be here, and if so, investors should want to get involved.

goldman sachs revealed that its top brokerage saw its biggest single-day buying spree since march 2021 and the second-highest on record after tuesday's announcement of policy easing measures. banks report that hedge funds primarily buy single stocks across multiple sectors, including consumer staples, industrials, technology and materials.

bank data showed that while hedge fund exposure to chinese equities increased sharply this week, it remains below historical records and hovering near five-year lows compared with highs in 2023 and early 2020. allocations to china-focused hedge funds have declined among hedge fund investors, according to a recent bank of america survey, with u.s. investors saying their investments in china-focused hedge funds have fallen 15% this year.

hedge funds trading stocks in asia also rose 1.1% on tuesday, bringing their monthly performance to 2.4% and year-to-date returns to 9.3%, goldman sachs reported on wednesday. a separate report from goldman sachs earlier this month said hedge funds trading stocks in the region returned negative 0.4% in august, but are still up 9.2% this year.

it has been observed that many foreign-funded institutions are still hesitant and skeptical, and they are still waiting for the effect of the policy. a conference call with several major banks stated that there is currently a lack of stimulus scale and implementation details, and that it is necessary to pay close attention to the subsequent specific implementation and timetable to judge its true impact. hedge funds are relatively more active. before the rise, they had already made some moves in the hong kong stock market.