政策大禮包頻出！中國資產能否持續回暖？
【Investment Talk】Central government policy has fallen! Is the second wave of the bull market coming?
At the end of September, the Chinese government released a rareStimulate the stock marketThe signal. Chinese stocks rise in a short period of timeSkyrocketing, from 8 October onwardsStrong callback.
However, the market took a sudden turn on 18 October when investors were wondering whether this round of trading would end there. All-day trading of A-shares topped RMB 2 trillion, while China's FTSE A50 index rose 3%. Many shareholders shouted“The second wave of the bull market has arrived!”
Why is the market mutating? Is this a good time for you? Ox sir let everyone have a simple interpretation.
Innovative policy falls apart, sparking a market rebound?
The breakout point of this rebound may be from a dynamic from October 18:Bank of ChinaTwo supporting stock markets are officially launched todayInnovative monetary policy(Previously announced on September 24). Here is a quick introduction to these two innovative tools:
Share Repurchase Increasing Refinancing: The central bank investment-backed commercial banks issue private loans to listed companies and shareholders to repurchase or increase their own shares.
Interchange Facility (SFISF): Allows large financial institutions to exchange highly liquid assets such as national bonds from the central bank for securities secured by the central bank.
Let's get this straight: China's central bank injects liquidity into the stock market!
This is in ChinaNever seen beforeThe policy shows the strong desire of regulators to stimulate the stock market. As a result, the Chinese stock market, which has not recovered for almost 3 years, has provoked a strong momentum to do more.
During the market adjustment, investors complained that the stimulus policies previously promised by the regulator have failed to materialize. Seeing a weakening trend in market popularity, the central bank has put a heavy weight on its policy. When policy falls, market sentiment immediately reverses.
The situation is clear: the core driver of the Chinese bull market this time comes fromExpectations for Strong Policies, rather than a real economic recovery. The trend of this kind of behavior is mainly due toMood-Driven, stock price volatility is usually high.
What is the market talking about? Tech Stocks Are Leading the Rampage!
THE PREVIOUS WAVE OF BULLISH ACTIVITY WAS HEADLINED BY SECURITIES AND SEMICONDUCTOR BLOCKS, THIS TIME TRADINGSemiconductor BoardsIt was a horse first.
The logic behind the market isFried Tech Stocks, after all, it is said that “to promote Chinese-style modernization, technology must take the lead”.
Ever since the US launched a tech blockade on China, autonomous tech innovation has become a common goal up and down the country. And China's technological breakthroughs are also evident today, leading the world (perhaps second only to the United States) in the leading fields of electric cars, clean energy, robotics, artificial intelligence, and more.
Source: Yushu Science and Technology Official Website (China Robot Unicorn)
Naturally, technology stocks have become one of the most buzzed-about topics in the stock market, and it's no wonder.
Semiconductors are being sought as the core of the tech stock as well: Almost all of the cutting-edge technologies in the world today are inseparable from the support of semiconductors. The second semiconductor industry is large and the company has high profitability flexibility. Thirdly, China's semiconductor industry is developing rapidly.
Largest semiconductor equipment company in China $NAURA Technology Group (002371.SZ)$ For example, the company had a revenue of RMB 22.1 billion in 2023, an increase of 440% compared to 2019!
In addition to semiconductors, technology stocks such as artificial intelligence, robots, flying cars are also doing well. While many stocks are speculative games when the market is full of liquidity, there is no shortage of real material.
LARGEST SUPPLIER OF LIGHT MODULES BY ENVIDA - $Zhongji Innolight (300308.SZ)$ For example: Since the emergence of generative AI in 2023, its share price has increased by about 700% to date, not less than that of Inweida.
Here comes the question that everyone cares about: How to go after the city?
First of all, it should be emphasized once again that the Chinese stock market in the short term is mainly driven by market sentiment, high volatility and higher investment risks. Participants may need to be mentally prepared: If they cannot tolerate volatility, they may not be suitable for joining the current market.
Looking ahead, the following points will be key to the movement of the Chinese stock market:SEE POLICY CATALYSTS IN THE SHORT TERM, LOOK AT THE PACE OF INTEREST RATE CUTS IN THE SHORT TERM AND ECONOMIC FUNDAMENTALS IN THE MEDIUM TERM.
Policies affect short-term sentiment and have a crucial role to play on economic fundamentals. The main areas of interest in the market are the following:
One is monetary policy:Look at the positive actions of the Bank of China. In addition to the two major innovative tools to support the stock market, the Bank of China on October 21Lower benchmark interest rate 25bps(Largest single decline in history).
The second is fiscal policy:The Market Is Most Concerned About Central FinanceIs it determined to widen the deficitto bear the burden of resolving local debt and stimulating the economy.
Three is property policy:Property SlipsAs the biggest drag on China's economy, markets expect a policy shift to stop it.
If we believe that the Chinese government is determined to launch a strong stimulus, then actively embrace this action and resist fluctuations in the middle.
Others are more inclined to start again, such as signs of economic change, which is a strategy that many institutional funds and foreign funds intend to do.
The question everyone is more concerned about is: How to invest in the Chinese stock market?
The first way is to buy Chinese stocks directly. The trend of Hong Kong stocks, US stocks and A shares is broadly consistent. The A shares have been a little stronger recently and the hype about the topic is more intense. HK share capital may purchase some A shares via internet and interconnection.
Another way is through an ETF:
1. Hong Kong Stock ETF(Refer toGetting Started with Hong Kong Stock ETFs: If you want to save money, beginners can follow these 4 types of stock ETFs)
2. A-shares ETF
3. US Stock ETF
Finally, remind people that you need to consider your investment goals and risk tolerance before making an investment decision! We hope everyone can make money, and please share any investment ideas below~
* Any securities referred to above do not represent any investment advice and are for investment education purposes only.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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