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The foreign giants suddenly started.
The latest news shows that Ashmore, an international asset management giant, is reducing its position in Indian stocks and has listed China as the top investment choice for its emerging market funds. Edward Evans, manager of emerging market equity portfolio in London, said that the fund allocated 26% of its emerging market equity funds to China, while reducing the proportion of India to 12%.
From the perspective of the market, after the three A-share indexes opened low today, they collectively rallied to counter attack, and the Shanghai Index rose by more than 1% in the day, once reaching a new high of 3100 points in the year. At the same time, the FTSE China A50 index futures also rose sharply in the morning, and rose 1.25% at one time.
Standing in the present, how will the A-share market evolve in the future? Recently, several foreign institutions made the latest research and judgment on the investment strategy of the A-share market in the second quarter. Many institutions said that with the steady repair of the macro-economy, A-shares are expected to stabilize and continue to rebound in the second quarter. In the medium term, A-shares deserve more optimism.
A-share counter attack
On April 18, after the three A-share indexes opened at a low price, they collectively rallied and counterattacked. The Shanghai Index rose by more than 1% in the day, once reaching a new high of 3100 points in the year. As of 13:30, the Shanghai Index rose 0.36%, the Shenzhen Composite Index rose 0.59%, and the GEM Index rose 0.19%.
In terms of individual stocks, the overall increase was more than the decrease, and more than 3000 individual stocks rose in the whole market. The half day turnover of Shanghai and Shenzhen stock markets was 619.3 billion yuan, 49.3 billion yuan higher than the previous trading day. In terms of northward capital, as of 13:00, the net outflow of northward capital was 4.24 billion yuan, 1.504 billion yuan from Shanghai Stock Connect and 2.736 billion yuan from Shenzhen Stock Connect.
Following yesterday's A-share banking sector, CITIC Bank After closing the trading limit board, market funds continued to chase bank shares in the morning trading today. CITIC Bank rose its limit again in the session, and Bank of China, Agricultural Bank of China and China Construction Bank all set a new record in the session, Industrial and Commercial Bank of China It was only one step away from the historical high, and then the increase narrowed.
In addition, the hottest segment of the market, the concept of low altitude economy, has once again set off a rising tide, Jindun Shares 、 Andavil 、 CITIC Haizhi 、 Wanfeng Aowei More than 10 shares were up and down strongly.
On the news side, Shan Zhongde, Vice Minister of the Ministry of Industry and Information Technology, said at the press conference held by the State Council Information Office today that the next step is to accelerate the creation of a new engine for low altitude economic growth. Focus on four aspects of work: first, accelerate equipment innovation; Second, strengthen application traction; Third, enhance technical penetration; Fourth, strengthen standard support.
In the morning trading today, the FTSE China A50 index futures also soared sharply, rising 1.25% at one time in the session, and then narrowing. As of the press release, the intraday increase was 0.44%.
Good peripheral sudden transmission
On April 17 local time, Bloomberg reported that Ashmore, an asset management giant, was reducing its position in Indian stocks and listed China as the first choice for its emerging market funds. The company believes that the Indian stock market is over hyped and overcrowded, while the Chinese stock market is expected to rebound.
According to the report, Edward Evans, the manager of emerging market equity portfolio in London, said that the fund invested $6.5 billion (about 47 billion yuan) in emerging stocks, allocated 26% of its emerging market equity fund to Chinese stocks, and cut the proportion of India to 12%. He believes that valuation differences are the main reason for this decision.
It is reported that Ashmore Group plc is a professional asset management company in emerging markets (London Stock Exchange stock code: ASHM). According to its latest quarterly report as of March 31, 2024, the company's net outflow in this quarter was $2 billion, reducing the asset management scale from $54 billion at the end of December last year to $51.9 billion (about 380 billion yuan).
Mark Combs, CEO of the agency, said that the performance of emerging markets in this quarter was mixed, because stronger than expected economic data reduced the expectation of the Federal Reserve to cut interest rates.
Mark Combs believes that in the short term, compared with developed countries, the macroeconomic stability of emerging countries supports the excellent growth of GDP, and many central banks continue to cut interest rates to cope with low inflation.
Mark Combs believes that Ashmore is still in a favorable position and can benefit from capital flows following these positive market trends.
In addition, Bank of America's monthly fund manager survey in April showed that investors' confidence in Chinese stocks improved slightly, and the allocation of Chinese stocks rose slightly for the second consecutive month.
It is reported that this survey investigated 224 asset management companies from April 5 to 11, and the assets under management of these institutions reached 638 billion US dollars (about 4.6 trillion yuan).
The survey also showed that fund managers increased their allocation of stocks and commodities and sold bonds. Global growth optimism showed the largest growth rate since May 2022, with commodity allocation hitting a record high and stock allocation hitting a 27 month high.
The proportion of cash level in assets under management decreased from 4.4% a month ago to 4.2%, while the net reduction of investors' holdings of bonds reached 14%, down 20 percentage points month on month, the largest decline since July 2003.
How can I get to the back market?
Many analysts believe that the overall valuation of A-shares is still in the global depression, and the valuation of blue chips and large cap stocks is lower than the market average.
Recently, many foreign institutions made the latest research and judgment on the investment strategy of the A-share market in the second quarter.
Among them, Nomura Orient International Securities said that A-shares were expected to stabilize and continue to rebound in the second quarter, mainly because high-frequency data increased the probability of economic stabilization, providing an opportunity for most industries to repair valuation. For the capital market, stronger than expected high-frequency economic data give marginal support to the market. The gradual generation of economic stabilization expectations will become the most important marginal change of A-shares in the second quarter.
In the last quarter, China's economy delivered a report card that exceeded expectations. According to the data disclosed by the National Bureau of Statistics, China's GDP grew 5.3% year-on-year in the first quarter, exceeding expectations.
Meng Lei, China equity strategy analyst at UBS Securities, also believes that a new round of rebound may be in the pipeline. At the beginning of the new year, the trend of A-share market was weaker than expected. Due to the intensive voice of government departments to demonstrate their determination to maintain the capital market, market liquidity risk has been alleviated, and investor sentiment has stabilized and recovered. In his view, the increase in earnings expectations and the favorable policies on high-quality development of the capital market will promote the A-share market to gain a new round of momentum in the second quarter.
Goldman Sachs said in its recently released report that it expected that there would be 12% and 8% potential upside for A shares and H shares respectively in the next 12 months. We are optimistic about consumer technology/Internet stocks because of a more favorable income growth environment and relatively good capital expenditure/cost control. Continue to focus on shareholder returns, because dividends and share buybacks in 2023 have reached historical highs.
Morgan Stanley Fund also believes that since the second quarter of this year, China's PPI (National Industrial Producer Factory Price Index) and other indexes are expected to start rising, and the earnings of listed companies will improve significantly. In the medium term, A-shares deserve more optimism.
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