Economic Observer Network reporter Cai Yuekun On December 29, the last trading day of 2023, the major A-share index ended in red. As of the close, the Shanghai Composite Index rose 0.68% to close at 2974.93 points; the Shenzhen Stock Exchange Component Index rose 0.89% to close at 9524.69 points; the GEM Index rose 0.63% to close at 1891.37 points; the Science and Technology Innovation 50 Index rose 0.19%, and the Beijing Securities 50 Index rose 0.19%. up 2.48%.
It is worth mentioning that Industrial Bank (601166.sh) reached its daily limit in the late call auction. As of the close, Industrial Bank's share price closed at 16.21 yuan, up 9.97% throughout the day, with a market value of 336.8 billion yuan. After the market closed, the reporter consulted the Industrial Bank investor hotline. Relevant people said that there is currently no information that should be disclosed within the bank but has not been disclosed. There are currently many rumors in the market, and it is recommended that the information released through the company’s official channels should prevail.
In addition, the Shanghai Stock Exchange also issued a notice on the abnormal transactions in the closing call auction of Industrial Bank shares on December 29, 2023, saying that after preliminary verification, it was caused by an investor placing a large transaction at a price that significantly deviated from the latest transaction price of the stock. The Shanghai Stock Exchange will conduct further in-depth verification of the relevant situation and take corresponding measures based on the verification results.
Throughout 2023, most major A-share stock indexes closed down. Among them, the Shanghai Stock Exchange Index fell 3.7% throughout the year, closing below 3,000 points; the Shenzhen Stock Exchange Component Index fell 13.54% cumulatively; the ChiNext Index fell 19.41%, the largest decliner. For the first time; the Shanghai Stock Exchange 50 and CSI 300 indexes have been negative for three consecutive years; the Beijing Stock Exchange 50 Index rose sharply in the fourth quarter, rising 14.92% for the whole year.
This year, investors once again experienced the anxiety and hesitation when the Shanghai Stock Index fell below 3,000 points.
Bull and bear show
From the perspective of the whole year, 2023 is undoubtedly a big year for the A-share market. The wave of AI runs throughout, whether it is CPO (chip packaging optimization) and computing power on the hardware side, or AIGC (artificial intelligence) on the application side. Generated content) are constantly increasing the popularity of the market. In the second half of the year, Huawei Concept emerged strongly, with Huawei mobile phones, Huawei cars, Huawei Hongmeng and other sectors successively debuting. In addition, sectors such as robot reducers, data rights confirmation, and short drama games have also become hot spots that investors cannot ignore. From the perspective of growth, the AIGC sector leads the market with a year-round growth of 63.41%, and the CPO sector also has a year-round growth of more than 50%.
From the perspective of individual stocks, the top ten bull stocks in 2023 are newly released - Beijing Stock Exchange Kaihua Materials (831528.bj) came from behind and won the first place with a 573% increase. Liant Technology (301205.sz), which had the largest increase in the first half of the year, had a cumulative increase of 772% in 118 trading days. In the third quarter, it entered a state of continuous correction, and finally retreated to second place with an annual increase of 400%. Shenglong Shares (603178.sh) went through a 14-day market trend after the National Day, narrowly beating Baili Tianheng (688506.sh) with an increase of 386.87%, and won the third place.
In addition, the top ten bear stocks in 2023 have also been settled. In the A-share market, 84 stocks saw their share prices halved throughout the year, 17 of which fell more than 60%, including a number of star stocks such as Yuneng Technology (688348.sh) and Paineng Technology (688063.sh). Among the top ten bear stocks, the stock price of ST Zuojiang (300799.sz) collapsed by nearly 80% at the end of the year. Except for ST stocks, the rest are basically concentrated in the direction of new energy (optical lithium storage), including Yuneng Technology (688348.sh), Haiyou New materials (688680.sh) etc.
From the perspective of northbound funds, according to Wanquan Intelligence statistics, since 2017, as the inclusion weight of A-shares in the MSCI China Index has continued to increase, the size of foreign capital’s positions in A-shares has also continued to increase. This This trending inflow has become an important factor affecting the ecology of A-shares. Even when the market fell sharply in the fourth quarter of 2018, foreign investors were able to continue to increase their positions against the trend during the decline. Different from previous situations, since July 2023, when the "policy bottom" and "economic bottom" of A-shares have appeared one after another and the market has remained low, northbound funds have continued to flow out. Among the 40 trading days from August 2 to September 28, northbound funds experienced net outflows on 31 trading days, with a cumulative net outflow of 132 billion yuan.
Wanquan Intelligence stated that in the fourth quarter of 2023, the net outflow of northbound funds also exceeded 78 billion yuan, and the total net outflow amount exceeded 210 billion yuan. This number far exceeds previous historical extremes. The continued trend outflow of foreign capital is a major change in the A-share ecology, and domestic investors need time to adapt to this change.
However, looking at the whole year of 2023, northbound funds are still in a state of net buying throughout the year, with a cumulative net buying of 43.7 billion yuan, a decrease of 46.3 billion yuan compared with last year. This is the 10th consecutive year of increasing positions since the opening of the Mainland Stock Connect. a shares.
Policy efforts
A notable feature of A-share policy in 2023 is the frequent emergence of favorable domestic policies, which effectively stabilizes and boosts the continued sluggish confidence of A-share investors.
On December 29, the last trading day of 2023, both the Shanghai and Shenzhen Stock Exchanges announced the exemption of initial listing fees and annual listing fees for existing and incremental listed companies on the Shanghai Stock Exchange in 2024. The Shanghai Stock Exchange stated that in recent years, the Shanghai Stock Exchange has introduced fee reduction measures many times to provide profits to the market while continuing to improve market service levels. In order to promote the development of new products and new businesses, we have successively implemented the exemption of listing fees for listed funds, listing fees for public REITs (real estate investment trust funds) and transaction handling fees; in order to support corporate bond financing, bond transactions other than convertible bonds are exempted. The fee is 3 years; in order to activate the capital market and boost investor confidence, the stock transaction handling fee standard is reduced by 30%.
The Shanghai Stock Exchange stated that after the implementation of this fee reduction measure, the Shanghai Stock Exchange has waived all listing fees for Shanghai-listed companies for three consecutive years, exempted and exempted trading unit usage fees for members and others for four consecutive years, and subsidiaries have waived and waived all listing fees for Shanghai-listed companies for three consecutive years. Online voting service fees, ca certificate service fees, SSE cloud roadshow service, SSE chain service fees, etc., and data center cabinet service fees have been exempted and exempted for industry organizations for three consecutive years.
In addition, important policies for A-shares in 2023 also include regulatory support to increase the willingness to allocate insurance funds, equity fund policy guidance, as well as lowering the financing margin ratio and regulating the reduction of holdings in the secondary market.
Previously, on September 10, 2023, the State Financial Supervision and Administration Bureau issued the "Notice on Optimizing the Solvency Supervision Standards of Insurance Companies". Support for insurance capital's participation in the secondary market is mainly reflected in three aspects. On October 30, the Ministry of Finance issued the "Notice on Guiding Long-term and Steady Investment of Insurance Funds and Adjusting Relevant Indicators for Performance Evaluation of State-owned Commercial Insurance Companies." This assessment reform will help insurance capital, which is an important long-term fund, to increase the allocation of A-shares. In addition, in the A-share market, management’s policy guidance for equity funds is relatively active. After the Politburo meeting, the China Securities Regulatory Commission first mentioned "accelerating the reform of the investment side and vigorously developing equity funds" in implementing the spirit of the Political Bureau meeting.
Regarding regulating the pace of IPOs and refinancing, the Shanghai Stock Exchange emphasized "implementing strict concepts and high-quality concepts into the entire review and supervision process" to "guide the allocation of resources to major strategies, key areas and weak links." The Beijing Stock Exchange also mentioned that it “keeps the listing review and entry barriers and promotes the gathering of more financial resources to innovative small and medium-sized enterprises.” The Shenzhen Stock Exchange is also striving to promote the "Seven Strictnesses" and actively implement the major deployment of deepening and solidifying the stock issuance registration system.
From the perspective of strict supervision, on August 27, 2023, the China Securities Regulatory Commission made specific requirements for "further regulating the behavior of share reductions": listed companies have broken shares or net losses, or have not distributed cash dividends or accumulated losses in the past three years. If the amount of cash dividends is less than 30% of the average annual net profit in the past three years, the controlling shareholder or actual controller is not allowed to reduce the company's shares through the secondary market.
In addition to regulations on shareholding reduction, regulators have also made adjustments and optimizations to securities lending-related systems. “Raise the margin ratio for securities lending from no less than 50% to 80%, and increase the margin ratio for private securities investment funds participating in securities lending to 100%”, and “cancel the special funds established by listed company executives and core employees by participating in strategic placements” Asset management plan lending, moderately restrict the lending methods and proportions of other strategic investors in the early stage of listing." Wanquan Intelligence believes that on the one hand, the above adjustments reduce the resistance to further short selling when the market is low. On the other hand, it also promotes the standardization of holding reduction behavior in the capital market through restrictions on regulatory arbitrage, disguised selling and other behaviors.
In 2024, opportunities outweigh risks
On December 29, 2023, Banxia Investment Li Bei published an article "Short Squeeze" on the company's official account, which attracted widespread attention.
In Li Bei’s view, private equity, insurance, public equity, and foreign capital currently do not have enough positions.Regarding the A-share market, in mid-December 2023, Li Bei said when participating in the Snowball Carnival that the end of 2023 and the beginning of 2024 are very important changes. At the beginning of the year, everyone will start a new round of asset allocation and re-evaluate who will look at it. The price/performance ratio is better, and some smart money may re-enter China. There are also some domestic funds that may choose to invest in stocks with a high probability, such as insurance companies.
She also said that the "asset shortage" will become a more major contradiction in 2024, and the beginning of 2024 is a very important change review.
Looking forward to 2024, Bank of China Fund said that from a fundamental perspective, with the steady recovery of my country's economy and the bottoming out of ppi (producer price index) year-on-year, corporate profitability is expected to further improve, coupled with the reversal of the domestic inventory cycle, It is expected to drive the molecular end of A shares upward. In terms of liquidity, on the one hand, domestic monetary policy is expected to maintain a stable but loose tone. The central bank's third quarter monetary policy implementation report also continued the statement that "monetary policy must be precise and powerful." There may be no need to worry too much about domestic liquidity. On the other hand, although the Federal Reserve has stated internally that it does not rule out the option of further raising interest rates in the future, due to the generally weakening data on inflation, employment, consumption and other data released recently in the United States, the market believes that the interest rate hike cycle has ended, and has even begun to anticipate the arrival of interest rate cuts. The suppression of A-shares by overseas liquidity may also be significantly alleviated. Generally speaking, the momentum of good economic development will be transmitted to the equity market. It is expected that the winning rate and odds of A-share investment in 2024 will be improved compared with 2023.
CICC believes that since the beginning of 2023, the A-share market has first risen and then declined, and the overall performance has been slightly flat. After adjustments, market valuations have gradually approached historical extreme levels, and current asset prices may have implied too pessimistic expectations. Looking forward to 2024, although we need to deal with the emergence of some internal and external medium- and long-term problems, considering that my country has large policy space, solid foundation, sufficient development potential, and global competitive advantages in many fields, under the baseline scenario, we believe that there is no need to be pessimistic about the future market performance. , market opportunities outweigh risks, and focus on staged and structural allocation.
