Entering 2012, the stock market saw some fluctuations. In the first month, the Shanghai Composite Index rose by 80.61 points, an increase of 4.24%. The regional leading stocks in the Xinjiang sector also showed signs of recovery. Among them, Zhun油股份 particularly exhibited the "kingly qualities" of a sector leader, with a January increase of as high as 13.21%, topping the list of Xinjiang stock gains.
ST Tianhong, Xibei Construction, and other individual stocks also performed admirably, far exceeding the overall market. More than 60% of Xinjiang's individual stocks outperformed the market in January.
Affected by the positive news of the "12th Five-Year Plan" for the Western Development Program, the Xinjiang sector was filled with spring-like vitality.
Investor: What I bought is Xinjiang's future.
Gao Jun, an employee of a listed company in Xinjiang, still clearly remembers that on January 10, the State Council's Leading Group for the Development of Western Regions discussed and passed the "12th Five-Year Plan" for the Western Development Program. Combined with the ongoing "two sessions" in Xinjiang releasing some favorable policies, the Xinjiang revitalization sector shone brightly in the Shanghai and Shenzhen stock markets that day, with seven stocks including Beixin Road & Bridge, Xinong Development, and Xinjiang Urban Construction hitting their daily limits.
"This has restored my confidence in the Xinjiang sector," Gao Jun told reporters yesterday. Over the past two years, the stock market has been on a downward trend, and even the Xinjiang sector, which was once hailed as a "regional leader" concept, failed to bring hope to investors. Although the current stock market is still relatively sluggish, isn't it true that bad times last three years but good times only one? Now it seems like an opportunity to "mine for gold."
"With the continuous policy tilt towards Xinjiang by the state, I believe this is a good choice. I am optimistic about Xinjiang's development prospects," said Gao Jun.
Data shows that the Shanghai Composite Index fell by 21.68% throughout 2011, while the Xinjiang revitalization sector fell by 42.4% during the same period. Entering 2012, the market experienced slight fluctuations, with the Shanghai Composite Index rising by 80.61 points in the first month, a growth of 4.24%. Meanwhile, the Xinjiang sector surged forward, with Zhun油股份 seeing a January increase of as high as 13.21%, topping the list of Xinjiang stock gains.
Among the 37 individual stocks in Xinjiang, 9 fell in January; among the 28 that rose, 5 had increases less than the Shanghai Composite Index. More than 60% of Xinjiang's individual stocks outperformed the market in January.
"From the data, we can see that the fall in the Xinjiang revitalization sector in 2011 was much greater than that of the Shanghai Composite Index. Apart from the unfavorable overall market environment, in fact, after several rounds of speculation under the 'regional concept,' the stock prices in the Xinjiang sector were already quite high, necessitating a correction," said Lian Hui, a researcher at Guotai Junan Jun Hong Wealth Management. With continuously increasing support, naturally, Xinjiang's listed companies are also facing significant development opportunities. After the previous market's wild sell-off, the valuation of some stocks has reached a reasonable level.
However, in Gao Jun's view, such a correction might be exactly what he wants. "If the Xinjiang stocks I'm stuck with have policy compliance and development prospects, I'll add to my position; if I have extra money, I'll choose a few more good local stocks."
Next page: Industry cannot invest indiscriminately
Industry: Cannot invest indiscriminately
The outstanding performance of the Xinjiang sector in January also sparked the investment desires of many investors. "Last year, the company's operating performance was good. Should I buy shares of Xinjiang companies?" Gao Jun said he often hears his colleagues discussing this matter recently.
Is another great run for the Xinjiang sector coming?
Despite the market continuing its rebound, it is worth noting that some individual stocks in the Xinjiang sector have experienced both increases and decreases in holdings.
On January 31, Guanghui Shares announced that Guanghui Group continued to increase its holdings by 5.7601 million shares, accumulating a total of 29.8037 million shares since the initial increase on October 12, 2011. On February 6, another 2 million shares of Bohai Leasing appeared on the block trading platform. Since December 23, 2011, Bohai Leasing has made 15 transactions on the block trading platform.
A private fund manager in the capital city stated: "Clearly, even with subsequent policy support, one cannot indiscriminately invest in the Xinjiang sector. In fact, observing the previous performances of the Xinjiang sector reveals that not all Xinjiang sector stocks rise uniformly. There is always a main theme or topic."
"The Xinjiang sector is not a short-term concept. From a long-term perspective, Xinjiang's strategic energy position will be further consolidated. With the acceleration of transportation infrastructure construction, Xinjiang's energy reserves will be transformed into real wealth, becoming an important part of Xinjiang's development," a representative of a joint venture fund company in Xinjiang said. However, this does not mean that all Xinjiang individual stocks will rise. The Xinjiang sector will inevitably differentiate in the future, and one cannot make indiscriminate investments. Careful identification is required.
He believes that regional planning and revitalization, especially industrial transfer and industrial structure upgrading, are long-term and arduous tasks facing the country, with certain uncertainties. Listed companies, as micro-operating entities, may also face risks of unmet expectations.
Next page: Suggestion: Investment should follow policy themes
Suggestion: Investment should follow policy themes
Western conceptual stocks have always been recognized as active topics in the market. In 2012, the global economy entered a period of many uncertainties, especially the constant impact of the European debt crisis on the A-share market. In such an atmosphere, the subsequent large number of meetings and discussions held by the management around the revitalization of Xinjiang's regional and industry characteristics became the trigger for speculative funds.
"The first wave of the Xinjiang sector was speculative concepts, the second wave was speculative expectations, and the next step is to speculate on real value. This is indeed worth the price, with great space, a process from virtual to real. It is very different from the Hainan and Tibet sectors, which are just speculative bubbles," a private fund manager in the capital city indicated. Of course, although the Xinjiang sector performed well in January, from the current situation, relying on the Xinjiang sector to boost market sentiment is impossible, but the risk is not too high.
"Policy has a long-term impact on the Xinjiang sector," Zhu Bing, an analyst at Xiangcai Securities' Urumqi branch, said. Xinjiang is rich in resources, and the country regards Xinjiang as a strategic height, improving the treatment of Xinjiang residents, and considering it as a long-term strategy. This is a substantial benefit.
Market analysts believe that benefiting from the "12th Five-Year Plan" for the revitalization of the west, not only new energy but also individual stocks in industries within the region, including infrastructure cement and agriculture, should receive attention.
Firstly, starting from the coal and natural gas resource advantages of western regions, paying attention to resource-related listed companies is the "top priority." Secondly, the backward infrastructure is the main obstacle to the economic development of western regions, and improving infrastructure construction remains an important area of policy investment.
Meanwhile, with the acceleration of infrastructure construction, it will directly drive the demand for local cement and steel as well as other consumption, thereby enhancing the benefits of industry companies. Investors should pay attention to relevant industry companies.