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investors' enthusiasm for a-shares mainly stems from two aspects: first, the current market valuation and price are low, and second, the strength and potential effects of the policy have been recognized by the market

article | "finance" reporter zhang xinpei huang huiling

editor|yang xiuhong

on the last trading day before the holiday, a shares experienced a historic and rare surge.

on september 30, a-shares once again continued their previous hot market. in just 35 minutes after the market opened, the transaction volume of the shanghai and shenzhen stock markets exceeded 1 trillion yuan, setting a new record for the fastest 1 trillion yuan transaction in history. wind’s total a turnover exceeded the 2 trillion yuan mark, the first time since june 2015.

as of the close, the shanghai stock exchange index stood at 3,300 points, setting a new high in the past year. in less than 10 trading days, the shanghai composite index returned from 2,700 points to 3,300 points, performing a strong rise based on its strength.

in the end, the shanghai composite index closed at 3336.50 points, an increase of 8.06%; the shenzhen composite component index closed at 10529.76 points, a surge of 10.67%. a-share trading volume reached a record high of 2.5931 billion yuan throughout the day.

other major indexes also posted sharp gains. the chinext index, the science and technology innovation 50 index, and the north securities 50 index all closed up by more than 15%, and the north securities index increased by 22.84%, simultaneously setting a new record in history. the number of stocks rising in shanghai and shenzhen stock exchanges reached 5,330, and only 8 stocks fell.

under the hot market conditions, investors accelerated their entry into the market, and the number of people opening accounts at securities firms increased significantly. “account opening has been very popular in the past few days, and it’s so popular that i can’t even open an account.” a person in charge of the sales department of a securities firm told caijing.

funds are pouring into the a-share market, and large amounts of bank certificates of deposit are being transferred. on the morning of september 30, there was a delay in the bank-securities transfer system, and the trading system of securities firms was once again crowded.

“a-share mad cow” became a hot search topic. the money-making effect of the stock market is immediate, and "the author of the online article has made 3 million yuan in the stock market" has also become a hot search.

"the rise in a shares is so scary." many investors couldn't help but sigh. they hope that a-shares will rise sharply, but they are really frightened by the magnitude of the surge.

"the rise of the stock market is generally determined by two factors, one is fundamentals and the other is valuation. a healthy bull market should see fundamentals growing and valuations also growing. this is the best state." tsinghua university tian xuan, dean of the national institute of financial research at the university, told caijing.

in tian xuan's view, the recent surge in a-shares is directly driven by a series of favorable policies, which has led to a substantial increase in valuations. "the fundamentals have not had a major impact in the short term. the main reason is that the introduction of recent policies has affected investors' risk preferences, which in turn has affected valuations, leading to a sharp rise in the stock market in the short term." he said.

"but i think investors need to be rational. it may not be a good thing if prices rise too fast, like mad cows or anxious bulls." tian xuan told caijing. in fact, the industry has always believed that a healthy bull market should be a stable slow bull and a long bull, rather than a "mad bull" or "fast bull". a slow cow is a healthy cow.

"now that the market is irrationally bullish, we still hope investors can be more cautious." a brokerage source told caijing.

transaction volume reached a new high of nearly 2.6 trillion yuan

on september 30, the rise of a shares was enough to be recorded in history.

on that day, the transaction volume of shanghai and shenzhen stock markets continued to hit new highs. within 35 minutes of the opening, the transaction volume exceeded 1 trillion yuan. as of the close, the transaction volume was nearly 2.6 trillion yuan. among them, the turnover of the shanghai composite index was 1,167.8 billion yuan, and the turnover of the shenzhen component index was 1,425.3 billion yuan.

the rise is even a bit "crazy". as of the close, the shanghai composite index rose by more than 8% to close at 3336.50 points. the shenzhen component index rose 10.67%. the science and technology innovation 50 rose 17.88%, and the gem index rose 15.36%.

“i’ve been fully trapped, relying on securities stocks to get my money back within a week.” a retail investor said.

"hurry up and buy the hang seng etf and the gaming etf. they are the first choice for short-term investors. i bought the gem etf, but i also want to continue to add positions in the hong kong stock etf." a female retail investor recommended to a friend, "the stock market is too crazy. i also grab some large certificates of deposit, and the interest can exceed 3%.”

there are also investors who regret missing out on the hot market. "it has been sold out. i chose to sell before going on a trip, and now i can only watch the market going crazy." said a retail investor. "it's a perfect shortfall. because my family works at a securities firm, compliance requirements required my family to close their accounts before. i escaped the big drop and missed the bull market." another retail investor whose family members work at a securities firm said.

the hot market is making investors accelerate their entry. a person from the brokerage business department told caijing, “it’s completely impossible to open an account.”

in the early trading on september 30, some investors reported that the bank-securities transfer function was stuck and could not recharge their accounts; some investors reported that a securities firm failed to place an order and could not display data for login normally. the golden sun app of guosen securities crashed, and its customer service responded that because the order volume was too large, orders could be placed over the phone.

the atmosphere of a "bull market" has been continuously exaggerated in the past week. large-denomination certificates of deposit, which were previously hard to find, are now undergoing a wave of transfers. some investors even set profit margins in order to transfer quickly.

on september 27, gf securities and sdic securities issued announcements to temporarily close the next day entrustment function from that day until the opening time is notified.

brokerages worked overtime on weekends to meet the needs of account holders. the number of a-share account openings increased significantly, and investors born in the 1990s and 2000s entered the market.

data from the industrial and commercial bank of china show that its bank-securities net transfer index soared to 7.04 on september 27, setting a new high in three and a half years since 2021.

these data show that funds are entering the market at an accelerated pace.

the shanghai stock exchange will launch network-wide testing of platform-related businesses such as bidding and comprehensive business from 9:00 to 11:30 on september 29. the test, which occurred on a non-trading day, attracted the attention of many investors.

"these news will give investors a feeling that a bull market is coming, making investors' emotions very high. but rationally speaking, the rise is too fast and too much." a brokerage source told caijing.

tian xuan told caijing that the recent surge in a-shares was directly driven by a series of favorable policies, which led to a substantial increase in valuations.

according to industry insiders, the direct stimulus for this round of a-share surge is a series of policy combinations. on september 24, the state council's press conference on financial support for high-quality economic development was held. pan gongsheng, governor of the central bank, li yunze, director of the state financial supervision and administration bureau, and wu qing, chairman of the china securities regulatory commission, made heavy statements.

the politburo meeting held on september 26 emphasized the need to lower the deposit reserve ratio and implement a strong interest rate cut; to increase the countercyclical adjustment of fiscal and monetary policies; to work hard to boost the capital market, vigorously guide medium and long-term funds to enter the market, and open up the market. social security, insurance, financial management and other funds are stuck in the market.

industry insiders believe that "the policy mix exceeded expectations" and "has greatly enhanced investor confidence and further enlivened the stock market."

on september 27, the central bank announced that it would lower the deposit reserve ratio by 0.5 percentage points, directly fulfilling the monetary policy mentioned on september 24. on september 29, the people's bank of china and the state financial supervision and administration bureau issued a number of financial support real estate policies.

stimulated by good news about real estate, the sector rose 9.24% on september 30. the brokerage sector, usually regarded as the standard bearer of the bull market, also performed well. on the same day, the sector rose 10.39%. all 31 shenwan first-level industries rose, and 11 industries including computers, social services, media, non-bank finance, etc. increased by more than 10%. the banking sector, which had the smallest increase, also increased by 4.72%.

can the hot market continue?

boshi fund believes that continued favorable policies have further boosted market confidence. superimposed on the september pmi (purchasing managers index) data released on september 30, which was good, the manufacturing pmi rebounded from the previous month, the non-manufacturing and comprehensive pmi continued to be above the boom and bust line, and the marginal improvement in economic data also contributed to the improvement. market risk appetite.

xu gao, chief economist at boci securities, believes that the more-than-expected easing policy will significantly boost the sentiment of the capital market, but whether it can drive the growth of the real economy to stabilize remains to be seen from the next trend of fiscal policy. considering the liquidity that the central bank's new structural monetary policy tools will bring to the a-share market, the a-share market can rise independently of the conditions of the real economy to a certain extent. although this rise may be considered to contain elements of an asset price bubble, for two reasons, this rise should also be reasonable and sustainable.

morgan stanley fund believes that chinese assets have led the global market in recent times and are almost unanimously optimistic. in addition to northbound funds, private equity funds and individual investors are also potential promoters of incremental funds. at present, the momentum of substantial buying of chinese assets is expected to continue.

"we raise our year-end target price for the msci china index to us$70, 7% higher than the latest closing price, to reflect improved policy coordination, u.s. interest rate cuts and progress in corporate governance reforms." wang zonghao, head of china equity strategy research at ubs securities the conclusion is that a shares may currently have more room for upside, especially in the short term, although future trends will largely depend on the intensity of fiscal support and the implementation of various policy stimulus.

“based on our communications with investors, we believe that a package of measures to support consumption (money distribution) and local government financing are most popular with investors. in the next few quarters, we may also see more measures starting from improving corporate governance. many stock markets support policies," wang zonghao said.

it is worth mentioning that ubs securities has made some strategic adjustments: replacing some defensive stocks with selected small consumer stocks because they are expected to benefit from the government's possible payment of money to consumers. in addition, h shares will be tactically adjusted to a shares. "as increased policy support and upcoming corporate governance reforms are more beneficial to a shares than h shares, the performance of a shares may catch up with h shares in the short term."

"after a strong short-term rise, it is often accompanied by the emergence of short-term profit selling pressure. however, in view of the market's positive expectations for the introduction of policies and their effects, we expect that the subsequent macro economy is also expected to continue to gradually recover." hsbc jinxin xu tingquan, deputy director of the fund’s overseas equity investment department, said.

xu tingquan believes that the renewed interest of foreign investors in china mainly stems from two aspects: first, the current market valuation and price are low, and second, the strength and potential effects of policies have been recognized by the market. “when long-term funds return, some excellent companies with long-term growth space and opportunities may see a rebound in valuation. we believe that the beta of the investment portfolio can be increased in a timely manner because compared with the historical average of the past five years generally speaking, growth-oriented sectors are still obviously relatively undervalued.”

will the hot market of a-shares continue?

"i think the market will continue and may even hit a record high. especially high-quality stocks and real estate in core cities." a brokerage source said, "it has been too difficult in the past few years, and i finally see hope."

however, some institutions are relatively cautious. "investors' expectations for the stock market may be too high, which may overdraw the follow-up space." an institutional source believes.

cheng liang, fund manager of thirty-three degrees capital, also said that a real bull market requires a reversal in fundamentals to improve. the fundamentals of the overall economy still need to be observed, so conservative thinking is currently adopted.