On the eve of the Chinese New Year, the CSRC's leadership changed and the market reacted enthusiastically, with the new chairman quickly taking a series of strong market rectification measures after taking office. This gives me confidence that the problems at the "institutional" level of the market will be significantly improved. Under a more perfect institutional framework, the "attributes" of the market will also be improved, and the increase in holdings and dividends of listed companies will help investors have a positive understanding of the nature of the market. However, the fundamental attributes of the A** market as a financing platform will not change, especially in the context of macroeconomic transformation, industrial restructuring and the rise of emerging industries, the number of IPOs is expected to continue to grow, but the scale of a single project may be reduced, and the IPO phenomenon of tens of billions of dollars in the past may be reduced or even disappeared. The improvement of the system is undoubtedly a plus for the market, while the financing attribute of the market remains neutral.
As for valuation, I still insist thatWith the downward pressure of the macro economy, the overall valuation of A-shares will show a downward trend, and this law will not change due to the high market sentiment. This is a minus factor. Despite this, there is no shortage of funds in the market, and over-the-counter funds have been looking for investment opportunities, and foreign investors are also paying close attention. If the Fed cuts interest rates, the A** market could become an attractive destination for global asset allocation. I had expected a long recovery in market sentiment to take a long time, but it turned out that this repair was already visible in the three days leading up to the Chinese New Year, and the market's expectations and confidence in the bull market quickly rose. We should respect the forces of the market, not blindly dismiss the consensus of the masses.
To sum up, I believe that 2024 will witness a "recovery phase bull market", which is mainly a recovery of market confidence and sentiment after the new chairman's policy adjustments. This bull market may not be too violent, but will be dominated by a small bull market on the upside. Given valuations, I expect the market to fluctuate between 2,800 and 3,200 points. If there is a positive change in the economy, 3500 points is also expected. If the Fed cuts interest rates, it could trigger a larger bull market. Currently, the biggest challenge for investors is how to choose the right one to invest in a bull market.