In November, the stocks, bonds, and foreign exchange markets were all warm, but there were big differences. among others**Shanghai is strong and deep is weak, and the Beijing Stock Exchange is fierce; The bond market is stable and rises slightly in the long term, and falls slightly in the short and medium term; The RMB exchange rate has risen sharply across the board, constantly hitting new highs. At the end of November, there are only 25 trading days left for investment in 2023, and institutions have come to the market outlook for next year, so you can pay attention to it in advance.
Stock, bond and foreign exchange market performance in November
As of the 26th, the overall performance of the domestic market in November was warm.
*:wind** shows that the monthly line of A-shares has come out of the stop-fall pattern. Among them, the Shanghai Composite Index was slightly **074%, the Shenzhen Stock Exchange Component Index is slightly 023%, whileThe BSE 50 index rose 3125%, the largest monthly increase since listing, and also surpassed the major markets.
*The overall performance is not bad, but the differentiation is large. Wind data shows that:Since November, 3,920 of the 5,311 A-shares** have been listed, accounting for 7381%。In less than a month, there were 111 ** stocks with a huge increase of more than 50%, and only 71 ** with a large decline of more than 10%. It can be seen that A-shares not only have a large number of companies, but also occupy the majority of the gains, and the performance of the month has picked up significantly.
Bond market: Since November, the long-term Treasury bond** contract has moved higher, while the short- to medium-term has fallen slightly. Wind shows that the main continuous contract of the 30-year Treasury bond is the strongest, with 039%, ending two months**. The 10-year period, which is the most actively traded, as well as the short- and medium-term 5-year and 2-year periods, are all ** at 0Around 2%, the yield on Treasury bonds to maturity edged higher.
RMB exchange rate: Since November, the RMB has started to appreciate rapidly, wind data shows that on November 24, the central parity of the RMB against the US dollar continued to rise, achieving five consecutive rises to 71151, the highest since mid-June. Since November, the central parity of the renminbi against the US dollar has risen sharply by 628 basis points.
The onshore renminbi and offshore renminbi rose strongly against the U.S. dollar, both of which rose above 713 passes. among othersThe onshore yuan has exceeded 1,900 basis points against the US dollar since November, while the offshore yuan has risen by more than 2,100 basis points against the US dollarIt hit a new high since the end of July, and the rally was strong.
Market outlook for 2024
Macroeconomic aspect: open source ** He Ning believes that the waves are moving forward.
1) Fiscal policy: A new round of positive fiscal cycle may have begun, which is expected to open up room for leverage. Compared with the three historical cycles of fiscal expansion, the current deficit increase or the "outpost" of the shift in fiscal thinking points to 3% may no longer be a "hard constraint". First of all, from the perspective of international comparison, there is still room for leverage in China. Secondly, compared with the central government and the local government in China, there is still room for borrowing. At the end of 2022, China's first-class debt ratio was only 214%。Judging that in 2024**, it is expected to open up room for leverage, and the deficit ratio may be 35%-4.0%；Special bonds are expected to be flat at 38 trillion, and the broad deficit ratio is at 64%-6.8% range.
2) Monetary policy: Moderate easing to coordinate fiscal coordination and optimize credit regulation. Historically, fiscal expansion has generally led to the growth of broad money, and the growth rates of social finance, M0, M1, and M2 have risen. It is expected that the monetary policy will remain stable and loose in 2024, with a high probability of cutting the reserve requirement ratio and interest rates, and strengthening the dual adjustment of aggregate and structure. It is expected that credit will be widened, and the growth rate of social finance is expected to rebound in Q1, with a high before and then a low for the whole year. **Credit growth rate is about 103%, the growth rate of social finance is about 95%。
3) Asset** performance: domestic: stocks are better than debts;Overseas: Volatility may be amplified. In the short term: U.S. stocks, U.S. bonds, U.S. dollars
Aspect: Debang Wu Kaida believes that the capital market reform and the entry of funds into the market are brewing long-term bulls.
On July 24, the Politburo meeting was held, and the capital market first mentioned "activating the capital market and boosting investor confidence". In 2015, a large amount of money was invested in bailing out the market, for example, the central bank said that it would give liquidity support to securities companiesIn October 2023, ** funds - Huijin has two increases in holdings, one is the **big four banks, and the other is **ETF. Compared with the 2015 bailout, this round of policies and systems has been built more, including halving stamp duty, strictly supervising high-frequency quantitative trading, standardizing financing**, and encouraging increased holdings of repurchase dividends. When the market is in a downturn, it often leads to institutional reforms, which also lays the foundation for the medium and long-term return improvement of the secondary market. In addition, the financial work conference was held, and after the future financial work arrangements were deployed at the first level, it is expected that various departments will gradually implement it. Previously, the Financial Stability Law has been included in the first category of projects, and the call for financial stability protection** is increasing.
The main line of investment in 2024: to meet new tests, accelerate industrial upgrading, and ensure development support. As proposed in the recent ** financial work conference, "unswervingly follow the path of financial development with Chinese characteristics, promote the high-quality development of China's finance, and provide strong support for comprehensively promoting the construction of a strong country and the great cause of national rejuvenation with Chinese-style modernization". In this context, it is believed that "industrial upgrading" and "development support" are the two main lines of investment in 2024. In terms of industrial upgrading, we should focus on the two major sectors of digital China and manufacturing power, and the development support recommendation should focus on the two major sectors of energy security and financial power.
In terms of the bond market: Xu Yan of CICC believes that non-financial bonds are "short of assets", and the supply and demand of financial bonds are booming.
On the whole, as the main contributor to the supply of non-financial credit bonds, urban investment bonds are expected to maintain a net increase of about one trillion yuan in 2024 due to factors such as controlling the scale of new financing, replacing low-interest rates with high-interest adjustment structures, short-term bonds, and the growth of actual maturity caused by early repayment. Structurally, medium qualifications will still dominate, and the issuance of traditional bond issuance regions and regions with a relatively high proportion of bonds may slow down marginally. In the industrial sector, due to the low investment efficiency and insufficient willingness of enterprises to raise funds, while the loan cost of high-quality enterprises is lower and the difficulty of private issuance may still be maintained, it is difficult to become a new growth point. On the whole, we believe that the net increase in non-financial credit bonds may continue to fall slightly to the range of one trillion yuan, and the high-interest "asset shortage" will continue.
The supply of financial bonds is expected to continue to grow, showing a trend of both supply and demand. From the perspectives of the issuance approval of large state-owned banks and the changes in banks' risk-weighted assets and endogenous capital after the implementation of the new capital regulations, it is estimated that the TLAC gap faced by the four major banks in early 2025 may be around 600 billion to 800 billion yuan. In order to make up for the TRAC gap, the net increase of the two permanent bonds and non-capital bonds of the four major banks in 2024 may increase from the level of about 500 billion yuan in recent years; The net increase of other banks may remain at the level of about 100 billion to 200 billion yuan in recent years, and on the whole, the second permanent bonds of banks may continue to grow in 2024. However, considering that the overall financial supply after the new capital regulations is lower than previously expected, and the demand side may partially shift to finance due to the non-financial "asset shortage", it is expected that the supply will not bring a large impact on interest rate spreads.
In terms of RMB exchange rate:Huang Yue, a businessman, believes that on the whole, the RMB exchange rate may have the risk of two-way fluctuations in the short term, and the main influencing factor may be that the market's expectations for the resilience of the U.S. economy are repeated. However, in the medium term, the probability of appreciation is greater than that of depreciation. The strengthening of the RMB exchange rate is conducive to the rise of the risk appetite of funds in the domestic market, which may bring about the accumulation of a series of positive factors.
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