The bustling stock market

The A-share market is in this trend because of the lack of public offerings

As expected, A-shares opened high and stagnated in the previous trading day, and it was inevitable to fill the gap yesterday on Thursday. However, the sharp dive of the ChiNext Index in the middle of the day was beyond expectations. It seems that the ice is not formed in a day. The continued performance of new energy, even with more positive factors, cannot be reversed in a short time. This is also the reason why the ChiNext Index was nearly halved from its high in 2021. The difficult performance of new energy directly led to a record liquidation of funds.

According to statistics, 227 funds have been liquidated this year, while the number of fund liquidations in 2021 and 2022 were 254 and 235 respectively. If the current rate of liquidation is maintained, the liquidation of funds this year will be a record. It is believed that this is closely related to the decline of white horses and new energy. When new energy and white horse stocks were strong before, they attracted a large number of public and private equity funds. Many of them were raised after the surge, that is, they built positions at high levels. However, in the past two years, white horses and new energy have plummeted, which will inevitably lead to continuous losses for these funds that chased in at high levels. Ge Lan, the former number one in the 2 billion public funds, held white horses in medicine such as CXO and medical services, and the amount of losses once reached 3- billion.

Since a large number of institutional funds have been locked up in white horse and new energy, the market speculation direction this year has not dared to move closer to these two major types of stocks. In the first half of the year, the speculation was on the /zhong/.te/*/.gu/. led by oil, and the artificial intelligence sector led by GPT; while in the second half of the year, it was Huawei's industrial chain, computing power and other aspects, such as Zhongbei Communication and Hengwei Technology, which have increased several times this year. In addition, the recent rise of real-life games and online short dramas, such as Gravity Media, Tangde Film and Television, and Chinese Online, have all risen sharply. In essence, they are also speculations on junk stocks, and there are basically no public and private equity institutions.

It is precisely because of the lack of such a large institution-led market that the A-share market is in such a trend. The rebound is hesitant and the killing is more ruthless than anyone else! Of course, the public funds are now in a situation like a drowned dog, and it is entirely their own fault. It has always been emphasized that they are not real value investors, but trend speculators. Once a trend opportunity appears in a certain industry, they will flock to it, and the growth in the next few years will be fully realized. Then, if it is not as expected, it will be a Davis double kill.

If there is no strong policy support, it will be difficult for public funds to get out of the predicament on their own. I think that Huijin, which is a national team, should not hide its capital at present. If it wants to buy, it should continue to buy in large quantities to bring out the upward trend. Only in this way can a real long-term force be formed, and then various public and private equity funds will have the opportunity to quickly get out of the predicament, thereby activating the market.

Under the dilemma of public offering, the fundamental reason for the current active market is that the regulatory authorities paid timely attention to the quantitative market in the early stage, otherwise the current market would still be stagnant. Therefore, although the market is still weak, hot money will not stop and will still attack and ignite everywhere. Of course, this requires high technical skills, after all, it is like grabbing meat from a pack of wolves.

Judging from the overall market trend on Thursday, the index has actively retreated under the pressure of the 60-day and 10-week lines. This is necessary. Before the current support line of the daily line (the 20-day and 30-day lines of the Shanghai Composite Index) is broken, the index is unlikely to continue to fall or fall sharply. In the short term, the market will most likely develop in a way that the index is weak and individual stocks are exciting (this can be seen from the recent number of stocks that have had consecutive daily limit increases). Taking all factors into consideration, I personally believe that the strength of the short-term index adjustment will not be too great. After a short period of rest, it will once again launch an offensive against the previous trapped positions.

A-shares are welcoming a turnaround. The four words "welcoming a turnaround" summarize the current macroeconomic situation and the current stage of the A-share market. The current valuation is very attractive. The introduction of a series of measures to activate the capital market will also play a "catalyst" role and promote the recovery of the stock market. In addition, we can see that various types of industrial capital have increased their holdings and repurchased the stocks of listed companies; the dividend rates of some listed companies are also rising.

However, as the saying goes, after bad times come good times. If the number of fund liquidations this year hits a record, it is often an important signal of a bottom. Combined with the reforms in financing, investment and trading policies, there is no need to be pessimistic about the future market. Don't be discouraged for the products that are already trapped. The coldest weather has been weathered, not to mention the spring is coming soon. What we need to be vigilant about now is that short-term high-priced stocks are facing a retreat. On Thursday, the number of stocks that hit the limit-down increased to 10. We should prevent a new limit-down reshuffle tomorrow.