Looking back on A-shares in 2023, fierce battle of 3,000 points is an unavoidable keyword.
In February 2007, the Shanghai Composite Index stood above 3,000 points for the first time, and in the following 16 years, the Shanghai Composite Index hovered around 3,000 points. According to the statistics of Qu Tao, head of the financial engineering team of the Trusteeship Department of China Merchants, from 2007 to the present, among the more than 4,000 trading days, there are nearly 2,000 days below 3,000 points, and more than 2,100 days above 3,000 points.
3,000 points seem to have become the "Chu River Han Boundary" of the A** field, and it has also become the indestructible "faith" of the shareholders.
In fact, 3000 points itself has no special meaning, and the market and investors value it because it carries more expectations of investors and future possibilities. This is why once the ** breaks through the 3000-point mark, the defense war will begin.
In 2023, A-shares will once again start the "3,000-point defense war", which is different from before, with hundreds of billions of funds entering the market with the help of ETFs, and the share of ETFs in the whole market has hit a record high, totaling more than 2 trillion shares. At the same time, it has brought about and derived a series of trend reflections, including the trend controversy on the capital side, the institutional level of the capital market, and the structural changes in the investment model of domestic institutional investors.
At a time when the A** situation is in a downturn, the contention of views and brainstorming around these issues is beneficial to the steady and long-term development of A-shares. "The healthy development of A-shares is closely related to the high-quality development and opening of China's financial market and the allocation of residents' wealth. In particular, considering that the development history of A-shares is relatively short and the participating institutions are still not professional enough, the pricing power of domestic investors, especially the marginal pricing power, is weaker than that of foreign counterparts, which is why we closely track the flow of north-south funds and changes in China's capital account, in order to capture some important information from the existing market** and grasp the opportunity of the operation of the capital market. ”
Looking forward to 2024, a number of people interviewed by the 21st Century Business Herald reporter agreed that the market is obviously at the bottom of the cycle at this stage, showing a trend of bottoming out, but this round of bottoming process is longer than expected, the A-share inflection point is worth looking forward to, and the market as a whole has medium-term opportunities greater than risks.
On December 5, after a month and a half, the Shanghai Composite Index fell below the 3,000-point mark again, and the 3,000-point defense battle also started again.
Since February 16, 2007, when it broke through 3,000 points for the first time, the Shanghai Composite Index has been competing for this key point more than 50 times, and the success or failure of its defense has also become a demarcation mark for A-share bulls and bears.
Yang Delong, chief economist of Qianhai Open Source, said that the Shanghai Index, as an important integer threshold, will stand at 3,000 points after falling below 3,000 points. Yang Delong analysis said that recently, whether it is the policy or the market, in fact, it is to support the market, the Shanghai Index fell below 3000 points is temporary, the market actually has a number of bottom characteristics, do not need to be too pessimistic about the market outlook. ”
In fact, in the past 16 years, A-shares have stood at 3,000 points many times, and they all look the same, but they are actually different. More than 3,000 points more than ten years ago, the valuation of thirty or forty times, was a bubble;The current valuation of 3,000 points, which is eleven or two times, is underestimated.
On the one hand, in recent years, the number of listed companies in the A-share market has increased from more than 1,000 to more than 5,000 today. Among them, the constituent stocks of the Shanghai Stock Exchange Index have also increased from 900 to more than 2,000, and the proportion of industries has also changed, with the proportion of the financial sector falling from 45% to 22%, and information technology rising from less than 2% to 12%.
On the other hand, when it fell below 3,000 points for the first time in 2008, the price-earnings ratio of the Shanghai Composite Index was still more than 22 times, and now it has dropped to 12 times, which means that although the Shanghai Composite Index is still at 3,000 points, the assets are "cheaper."
This year, both the capital side and the sentiment side are important factors that dominate the market. Pan Xiangdong, chief economist of the Qirhenium Research Institute, said that the characteristics of the "stock market" of A-shares are more obvious, and the overall capital side continues to be weak.
Specifically, since August, a series of policies to activate the capital market and boost investor confidence have been released, including the regulator's announcement of halving the collection of stamp duty on transactions, tightening IPOs in stages, reasonably determining the scale of refinancing, and regulating major shareholders. The scale of the demand side of funds composed of IPOs, refinancing, and ** has narrowed significantly, and the net outflow of funds since September has eased compared with before. Northbound capital fluctuated greatly, and after July, it turned into a net outflow, and although the outflow of foreign capital has slowed down since September, the trend has not yet reversed. In addition, there has also been a significant outflow of the two financial institutions, and new accounts have basically remained low**. On the demand side, the scale of ** has shrunk, and IPOs and refinancing have fallen slightly.
Pan Xiangdong believes that the current market from the valuation level, turnover, investor sentiment and other related indicators show that the asset has implied too pessimistic expectations, and the index is in a state of over-falling. Looking ahead, the internal and external environment will gradually improve in 2024, so there is no need to be too pessimistic about the current time.
In Hong Hao's view, at the level of A-share funds, the market continues to shrink and fade, and its essence is still a lack of incremental funds and confidence. This is mainly due to the fact that in 2023, the interest rate differential between China and the United States has widened to an all-time wide, and is on par with the historical level of early 2006. Such smooth and wide spreads create opportunities for speculators to carry out trades and weaken foreign confidence and investment returns. As a result, rising U.S. Treasury rates and the strong U.S. dollar continue to siphon emerging markets.
Next, as the Fed's rate hike cycle comes to an end and interest rate cut expectations continue to rise, the interest rate differential between China and the United States should narrow. This return to normal spreads is expected to ease the withdrawal of funds and the pressure on Chinese assets**, as well as help the market intermittently** and repair.
Relevant data shows that since December, the net subscription amount of equity ETFs has exceeded 70 billion yuan, and the shares of many ETFs have hit a record high. In the view of industry insiders, the continuous influx of funds into ETFs has released a positive signal, and the valuation of A-shares is at the bottom of history, and the value of allocation is highlighted.
For the center of A-shares has always revolved around the 3,000-point mark, some insiders believe that a large part of the reason is the imperfection of the system.
In fact, in 2023, the A** field ecology will continue to be optimized. After fully considering the concerns of the market and carefully studying and evaluating the shareholding system, the China Securities Regulatory Commission issued a further regulation of the behavior of relevant parties, and issued the "Further Regulation of Shareholding Behavior" on August 27 this year, which can be called "the strictest new regulation in history".
On September 26, the Shanghai and Shenzhen North Stock Exchanges issued relevant rules to clarify the standards for breakage, net breakage and substandard dividends, and at the same time clarify the scope of the secondary market and increase the pre-disclosure of block transactions.
Some securities insiders said that it is necessary to further improve the various systems of the first class and integrate them with international standards as soon as possible, including market issuance, investment transactions and the delisting of the "survival of the fittest".
In terms of investment transactions, Xu Lin, a professor at the School of Economics and Finance of South China University of Technology, believes that integrity is the cornerstone of the company, and the investment style of the product should be adhered to, and the regulatory authorities should increase the punishment for the style drift anomaly of the product to create a good product issuance ecology.
At the institutional level, from the perspective of capital market opening, China should adhere to further expanding the opening up of the capital market, promote high-level opening-up, promote development through opening-up, and build a new development pattern of domestic and international dual circulation. With the further opening up of China's capital market, China needs to strengthen the management and supervision of QFIIs, guide QFIIs to play a role in maintaining the stability of China's capital market, and spread their mature value investment concepts to China, so as to reduce irrational investment behaviors in China's capital market.
Looking forward to 2024, a number of people interviewed by the 21st Century Business Herald reporter agreed that the market is obviously at the bottom of the cycle at this stage, showing a trend of bottoming out, but this round of bottoming process is longer than expected, the inflection point of A-shares is worth looking forward to, and the medium-term opportunities of the market as a whole outweigh the risks.
For next year's A** field, Pan Xiangdong is full of confidence. At the same time, the easing policy of the Beijing-Shanghai property market has also been implemented simultaneously, and the macro level can be expected to continue to support various economic work in 2024. The micro liquidity of the market will also improve with the further implementation of active capital market policies, such as the net increase in the secondary market holdings of important shareholders, the IPO has slowed down significantly, and the ** ETF has returned to net subscription, etc., and the margin of safety of the overall valuation of A-shares is relatively sufficient.
Wang Wei, deputy director of the Institute of Finance at Wuhan University of Science and Technology, is cautiously optimistic. It believes that from the analysis of the domestic and foreign environment, the pressure of capital outflow is easing, and the introduction of a series of policies to support the capital market are positive and favorable factors.
Hong Hao said that the current downside space is much smaller than the upside, or the risk is much smaller than the expected return, and mean reversion is the most fundamental principle of the financial market.
In his view, at this stage, the market is obviously at the bottom of the cycle, showing a trend of bottoming out, but this round of bottoming process is longer than expected. "After the baptism of rising and then declining, rising and falling in 2023, the current market's best reflection is decoupled from the marginal changes in fundamentals. The recent domestic economic data has picked up overall, and the policy direction is clearly visible, but the market reaction has been tepid, and it is clear that market volatility or overall market confidence is closely related to future expectations, which is precisely elusive. Author: Li Yu.