Just after long vacation of the Spring Festival, the People’s Bank of China gave a warning to the market. Large probability of “good start” of A-share in the past years was thoroughly knocked out: transaction was as low as 240.1 billion yuan, which is less than ten percent of 2015 summit – 2.48 trillion yuan. Real estate market falling into adjustment was also beaten by a staggering blow. However, gold stands steadily at USD1,200/ounce under the policy background of Trump’s restriction on Muslim immigrants.
Looking into the future, the senior market participants have reached a consensus that monetary policy will return to neutral state from loose state. As for stock market trend, there is a huge dispute among market participants; continuous acceleration of IPO and shift of monetary policy overshadows the continuity possibility of “spring market”; however, with increase of global uncertain factors, gold under the condition of “no-fall in bear market” is being favored by increasing senior market participants; real estate has become the bearish object in the eyes of quite a few institution experts.
“Is there any food” in stock market?
On Feb. 3, the first trading day after the Spring Festival, the People’s Bank of China up-regulated the interest rate of standing lending facility, and quite a few people expecting a “good start” of stock market was surprised. In that way, “is there any food” on earth in the anticipated spring market?
Hu Yu, the strategy analyst of Chinalion Securities, said to journalist of China Business Network that, monetary policy is becoming tightened, registration system is actually ready to start, ban-lifting and holding-shares reducing pressure is also large, and the current market evaluation is still in high-order position; it is anticipated that periodic maintenance of stability can only form rebound, the possibility of fall in the first half year will be large, the time will be about three months, and the bottom will be reached in late May; the possibility comes from fall and institutions will not attack heavily now, because the opportunity of super drop bounce hasn’t come yet after all; the number of entangled shares over 3,300 points is no little; now transaction is gradually shrinking, the market needs time for the change of space.
Li Lifeng, the strategy analyst of Sinolink Securities, believed that there is still inclination of “warm weather” market opportunity at current time-point facing the “policy interest rate” of the “People’s Bank of China” at the beginning of the year. As for after-market, numerous factors will be beneficial for promotion of risk preference; USD is weak, RMB is in appreciation recently, and hot money outflow pressure is substantially relieved; the usage of interest rate tool will be in temporary vacuum period, and the People’s Bank of China needs a long time to evaluate the influence on domestic economy, inflation, asset bubble and financial de-leveraging after up-regulation of “policy interest rate” this time; according to A-share annual report disclosure, it has been in intensive period, and the profitability trend of listed companies is expected to continue; market expects reform of “two sessions” of the central government; allocation requirement of material real estate object is lowering and funds are in backflow.
However, according to Chen Jie, the strategy analyst of GF Securities, it’s hard to trigger real “interest-rate rise cycle” when there is no obvious overheated economy environment; the following direction of monetary policy should return to “stable neutrality” from “stable inclined loose state”. Currently, both economic growth level and inflation level have been far from “overheating”, therefore, it is difficult to deduce whether there will be continuous interest-rate rise cycle in the future.
In that way, who will play the leading role in “spring market”? Quite a few investors are favoring the following objects, including “upside down” of share price and private placement price, one belt and one road, gold and other blocks.
As said by Yang Bingtian, the general manager of Jintian Longsheng Investment, huge ban lifting on private placement brings certain pressure to A-share, and current emphasis is whether self-assessment of investment object is attractive enough. Private placement price fall of a lot of companies is only a dimension; of course, because some companies with real growth potential follow the adjustment of market index, there is “upside down” between share price and private placement price, therefore, investors should pay significant attention to the situation; if the value of assessment is reasonable or even underestimated relatively, this will also be a good investment opportunity.
Is gold “no-fall in bear market” and real estate market “about to enter cold winter”?
After shift of monetary policy, market participants generally believe that gold will continue a new round of rising trend. As indicated by data disclosed last Friday, the non-farm payroll of the United States in January was increased by 227,000, far more than the market expectation. Neither the increase of interest rate by the People’s Bank of China nor the non-farm payroll of the United States exceeding the market expectation will suppress the strong trend of gold recently, presenting the feature of “strong in bad news”. The real estate market falling into adjustment in the fourth quarter of last year continues to be the bearish object in the eyes of market participants.
As expressed by Ren Zeping, the macro analyst of Founder Securities, looking into 2017, it was expected that the economy would reach double dip at demand side in the middle of the year, but the market would be cleared and the policy would turn to risk prevention and reform promotion form steady growth. When stock market turns to “performance bull” from “buffalo”, there will be no exponential opportunities but more structural opportunities, focusing on both performance and reform. De-leveraging the bond market, there may be trading opportunities before and after the second quarter. RMB will be stabilized in short term but still overestimated; the fallback of USD is good news to gold.
In the opinion of Jiang Chao, the macro analyst of Haitong Securities, the rising of interest rate means the increase of opportunity cost of gold, but the rising of interest rate will hit risk preference, and the decrease of risk preference will be good news to gold. However, from the perspective of inflation, short-term inflation will still be in relatively high level and inflation environment is good news to gold.
As to real estate, in the opinion of Jiang Chao, the cost for stable economic growth in 2016 was surge of housing price, sudden rise of leverage and pressure-bearing of foreign exchange. Restraining real estate bubble, preventing financial risks and promoting reform through regular adjustment of the Central Economic Working Conference would be the primary goal of 2017. The confirmation of the People’s Bank of China on the increase of interest rate means that the house loan rate has substantial up-regulation risk. At present, the more than 5 years’ benchmark interest rate for loan is 4.9%, which means that all discounted house loans will disappear based on the reasonable level of 5.5%, otherwise it will be better for banks to buy bonds. However, the real estate market in 2016 was abnormally prosperous. There was originally no support of population structure but a great number of house loans. If the future interest rate of house loans continues to rise, together with government’s restriction to house purchasing and loans in some first- and second-tier cities, the sale of real estate may continue to drop, and the severe winter of real estate market may be coming. As estimated by Ren Zeping, the housing price would be adjusted to the end of 2017 or 2018.
