In the first few days of last week, the overall market continued to fluctuate and fall, but encouraged by the Expo concept and surrounding markets, it closed with a medium-sized bullish trend on Friday, turning danger into safety. Currently, under the background of a favorable macro-economy and growth in listed company performance, the probability of a mid-term upward trend in the overall market is relatively high.
Focus Point One: The probability of the market having an oscillating upward trend is 80%.
From the perspective of news, policies related to stock index futures and margin trading are steadily advancing, IPOs in the market are maintaining a stable trend, and the Industrial and Commercial Bank of China has announced a refinancing plan with less financing than expected by the market. Meanwhile, the central bank has increased its efforts to recover liquidity through the open market, which although has some impact on the capital side, the continuous stability of interest rates has weakened the market's expectations for interest rate hikes. Additionally, credit growth in March may show an increase compared to the previous month, which will have a positive impact on the stock market.
The drought in southwestern regions has caused inflation expectations to rise again. However, from the composition of price indices, CPI will not be significantly impacted as a result, and it is likely that the CPI index increase will decline in March. Therefore, only under the premise that the fundamentals show clear signs of recovery and will not retreat again, can contractionary policies truly be implemented, and policy adjustments before this point will still prioritize maintaining economic growth.
In the production field, there is a certain divergence between the new high reached by industrial added value and the decline in PMI. Power generation data shows that the current real economy continues the rapid expansion trend since 2009. Investment data after quarterly adjustments maintains a rebound, indicating again that investment-driven growth may still be an important driving force for domestic economic growth. Under the promotion of downstream real estate construction and automobile sales warming up, positive changes signals appear in machinery, cement, steel, non-ferrous metals, and other upstream industries in the supply chain. Accompanying this, banks' operating performance maintains steady growth. As long as more recovery signals appear in the fundamentals, the value return of cyclical blue-chip varieties is worth expecting.
Technically, last Friday the overall market repositioned itself above all short-term moving averages, making the situation advantageous for the bulls. It is expected that this week the overall market will once again climb with oscillations, and the Shanghai Composite Index will attack the 3100-point range. Trading volume and heavyweight stocks led by bank stocks will be important factors determining the height of the market's rebound.
Currently, since the Shanghai Composite Index fell from 3478 points, the adjustment period has lasted 33 weeks. This week will face an important time window, and in terms of shape, it is also at the end of a large triangular consolidation. Under the background of a favorable macro-economy and growth in listed company performance, the probability of a mid-term upward trend in the overall market is high.
Focus Point Two: Agricultural, Forestry, Animal Husbandry, and Fishery Sectors Have Transactional Opportunities with a Probability of 75%
The provinces, autonomous regions, and municipalities in southwestern China are suffering from severe droughts. The current drought control situation in southwestern China is extremely severe. At the same time, northern China has "nine out of ten years of spring drought," and if there is a scenario of less rain, high temperatures, and windy weather later on, the drought situation in northern regions will develop quickly, potentially leading to simultaneous drought control efforts in both southern and northern areas.
Sugarcane sugar production has been severely affected. Guangxi and Yunnan are the main sugarcane sugar producing areas in our country, accounting for about 80% of the national sugar output. It is estimated that Yunnan's sugar output for this crushing season will decrease by 20%-30%, while Guangxi's sugar output will decrease by nearly one-tenth. Now that the crushing season has just ended, supplies are still relatively abundant, but the tightness of supply conditions will gradually become evident.
Grain prices will increase somewhat, further pushing up the CPI. Due to the increase in the minimum purchase price of grain, reduced grain output in Yunnan and Guizhou, and rising prices of domestic fertilizers and other agricultural materials this year, the possibility of future grain price increases is relatively high.
Drought triggers transactional investment opportunities in agricultural stocks. Currently, apart from being able to clearly judge the impact of the southwest drought on sugarcane production, the drought will not have a significant impact on national grain production, especially rice production. However, the rise in rice prices and its impact on the CPI cannot be ignored. The rise in agricultural product prices will bring transactional investment opportunities to relevant companies in the agricultural sector. Investors can pay attention to Beidahuang, Dunhuang Seed Industry, Denghai Seed Industry, Fengle Seed Industry, and Jian Rice Industry.
Focus Point Three: Hubei Sector Potential Probability 65%
Hubei's 12 trillion yuan investment plan benefits industry and regional leaders. Infrastructure projects account for the largest proportion in the investment plan, making up 30.6% of the total investment in provincial project libraries. The transportation project investment plan exceeds 1 trillion yuan, which is the largest proportion in the project library; the total scale of investment in ongoing and newly started projects in 2010 is 5.2 trillion yuan, accounting for 50.1%.
Individual Stock Focus: Huaxin Cement: The company's production capacity in Hubei accounts for 61% of the total production capacity, and it holds a 21% share of the Hubei market. Meanwhile, the company actively develops the profitable Tibet market and benefits from the rural building materials policy. It is estimated that the company's earnings per share for 2010-2011 will be 1.48 yuan and 1.97 yuan (after dilution); Gezhouba: The cement business is the second-largest source of revenue for the company. In 2009, the company's production capacity rapidly expanded, entering the top ten in the cement industry, and most of its markets are located in Hubei, benefiting from Hubei's fixed asset investment plan. It is estimated that the company's earnings per share for 2010-2011 will be 0.76 yuan and 1.00 yuan respectively.
Related thematic articles: _ Financial and other blue-chip stocks warm up, stock index breaks through the 60-day moving average line _ BDI index fell by 79 points on March 26, continuing to fall for the ninth day _ Chongqing Waterworks opened at 10.99 yuan, up 57.45%
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