Golden Certificate Advisor: White May is Worth Waiting for
Xiazhou Wanlong: Policy Shifts, Social Investment Benefits
World Base Investment: Pay Attention to Shanghai's "Expo" Theme Investment Opportunities
Guocheng Investment: Post-Festival Market Aims High, Control Position Patiently Hold Stocks
Chongqing Dongjin: Second Quarter Opportunities Come from Two Aspects
Jinbai Ben Investment: Insufficient Volume Still Restricts Subsequent Rebound Space
Bangyuan Securities: Three Small Peaks Defend the Dignity of the Stock Index, Two Hotspots Ignite Individual Stock Frenzy
Sentu Investment: Upward Momentum Insufficient, Neutral Outlook for the Future Market
Nanjing Shouzheng: Consolidate Foundation, Short-Term Market Will Still Fluctuate
Jiangsu Modern: Weekly Bullish Line Indicates Post-Festival Stock Index Likely to Continue Improving
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Golden Certificate Advisor: White May is Worth Waiting for
The two markets ended April's trading with a red close. Although the stock index fell this week, the subsequent market rebound with increased volume returned the stock index above the annual line. The 5-day, 10-day, and 20-day lines were also stepped on. By the end of the week, both markets ultimately rose. Such trading conditions should allow investors to welcome the May Day holiday with a relatively relaxed mood.
Recalling April's trading, it was indeed full of ups and downs. The two big bullish candles in April once boosted market confidence, but many investors also became panicked as a result. However, after two declines, the market resumed its upward trend: after the sharp drop on April X, the market immediately launched a short squeeze rally, directly breaking through the annual line; and when the market continued to probe lower on Monday and Tuesday this week, causing concerns, the stock index initiated a counterattack today and tomorrow, re-establishing itself above the annual line. It can be seen that whenever there is an opportunity, the market always has a strong resistance force that returns it to an upward trend.
Therefore, we are still optimistic about the May market situation. This is actually the main theme we have been advocating before: short-term adjustments will not change the medium-term upward trend of the future market. This is not only because the actual conditions of the market have not changed, but also from a policy perspective, support for the market's rise still exists.
On one hand, up to now, large-cap blue-chip stocks heavily held by major funds still lag far behind the overall market. The speculative activities of small-cap growth stocks dominated by speculative funds have nearly come to an end. In the climax of a bull market, the market must shift to being led by funds. From several trading days this month, heavily weighted bank, real estate, and petrochemical stocks held by funds have shown some co-movements in intraday trading, occasionally playing the role of stabilizing the market, and signs of fund participation are also evident. This lays a solid foundation for the further development of the market.
On the other hand, the country's loose monetary and fiscal policies have yet to change. Despite the near-collision of the 4.5 trillion yuan new loan quota in the first quarter, relevant departments recently stated that the new loans in the first quarter were healthy and reasonable, and the loose monetary policy would continue. Additionally, the State Council decided to reduce the capital ratio requirements for investment projects such as housing and coal. This is a significant fundamental benefit for the real economy and the capital market. Reducing the capital ratios of related industries will accelerate the completion and construction speed of relevant projects, thereby stimulating the rapid recovery of upstream and downstream industries, further revitalizing the real economy, and forming a medium-term positive factor for the macroeconomic fundamentals. Therefore, the continuation of loose monetary and fiscal policies will likely be a key factor in the market's medium-term rise.
Thus, we believe investors can spend a pleasant holiday awaiting the arrival of the May market and appropriately position themselves in bank and real estate-related individual stocks.
Xiazhou Wanlong: Policy Shifts, Social Investment Benefits
Key Points: From recent policy directions, how to relax restrictions and stimulate social investment has become the focus of policy, which is precisely a correction and adjustment to the previous administrative investment push with poor results. For the stock market, this may limit the staged inflow of social funds, making it difficult to activate certain related structural hot spots.
First, Policies Gently Stimulate Social Investment
Premier Wen Jiabao presided over a State Council executive meeting on the 29th, discussing and approving in principle the "Opinions on Deepening Economic System Reform Work in 2009", deciding to adjust the capital ratio of fixed asset investment projects. To respond to the international financial crisis, mobilize social and corporate investment enthusiasm, expand investment demand, and adjust and optimize the investment structure, the meeting decided to adjust the current fixed asset investment project capital ratio, reducing the capital ratio of urban rail transit, coal, airports, ports, coastal and inland river shipping, railways, highways, commercial housing, postal services, information industry, potassium fertilizer and other projects, while appropriately increasing the capital ratio of high-energy-consuming investment projects such as calcium carbide, ferroalloys, caustic soda, coke, yellow phosphorus, electrolytic aluminum, and corn deep processing projects.
From this, we can see two points: First, the management intends to reduce the fixed asset investment project capital ratio to directly stimulate social investment, freeing itself from the awkward situation of relying solely on policy-driven investments with low efficiency. Second, under the current circumstances, the management still intends to restrict some high-consumption investment projects, clearly intending to prevent structural overcapacity from worsening.
However, the main intention of the State Council's decision is reflected in lowering the threshold to stimulate private investment, which is consistent with the recent management's deliberate relaxation of restrictions on private investment in certain areas.
Second, Reflection and Supplement of Early Policies
In fact, we at the Wanyong Securities Network consider this to be a supplement and reflection of earlier policies.
A large amount of credit flowed into the virtual market in the first quarter, and administrative approvals further channeled funds into sectors with excess capacity, exacerbating structural overcapacity. This significantly reduced the effectiveness of early massive credit investments, and the direct stimulation effect of the policy was clearly counterproductive.
Currently, the management continues to emphasize relaxing investment restrictions and increasing credit support for small and medium-sized enterprises, which is a supplement to the earlier phase of policies. It attempts to activate social investment and directly use market-oriented methods to reverse the unfavorable situation of low investment efficiency.
Third, Analysis of the Impact on the Stock Market
In fact, from an overall perspective, the prosperity of social investment may instead limit the inflow of funds into the virtual market, but on the other hand, it may stimulate the emergence of some structural hotspots.
1) Restricted Capital Supply and Demand
There has always been a seesaw effect between the capital supply and demand in the real economy sector and the stock market. Stimulating private capital to flow into the real economy sector could directly restrict the phased supply of funds in the stock market itself. On the other hand, the recent increase in regulatory efforts by the CBRC regarding loan funds will still pose a significant deterrent to speculative funds in the market.
Therefore, the overall capital supply and demand in the stock market is instead restricted.
2) Stimulating Some Structural Hotspots
On the other hand, due to the expectation of the prosperity of private investment, it may bring about speculative activities in some structural hotspots. These mainly include related investment goods, consumption, and other sectors.
Shijie Investment: Pay Attention to Shanghai's "Expo" and Other Theme Investment Opportunities
Last week, the market experienced a sharp decline amid the spread of negative news. At the beginning of this week, panic caused by the sudden outbreak of swine flu further drove the market down, causing the Shanghai Composite Index to break below the annual line. However, after filling the 23-point gap on Tuesday and consolidating around the 24-point level, the market reversed its downward trend. On Wednesday, the financial sector's strong activation successfully reclaimed the annual line. On Thursday, the market continued its momentum, restoring the deteriorated moving average system, bringing the SSE Composite Index back near the 25-point level.
Looking at the market dynamics this week, the sudden outbreak of the swine flu pandemic triggered speculation in influenza vaccine-related pharmaceutical stocks. Leye Bio-Technology (SZSE: 002166) posted four consecutive daily limits, while Haiwang Bio-Technology (SZSE: 000078) and Pule Pharmaceutical (SZSE: 000739) saw weekly gains exceeding 3%. With these strong performers activating, the entire pharmaceutical sector came alive, though the follow-through effect was limited. We remind investors to cautiously avoid these stocks without substantial underlying themes. Future opportunities in pharmaceutical stocks will depend on the development of the H1N1 flu situation, which we will continue to closely monitor. Additionally, the formal approval of Shanghai's dual-port status and the potential inclusion of Hongqiao District into the Puxi area stimulated continuous strength in Shanghai local stocks. On Friday, the Shanghai sector showed robust performance, with Shen Tong Metro (SHSE: 600346), Shanghai Real Estate Development (SHSE: 600674), and Bus Co., Ltd. (SHSE: 600741) all showing notable performances. Shanghai local stocks, rich in themes like state-owned asset restructuring, Expo 2010, Disneyland, and dual-port status, have long been favored by the market, and deserve continued attention.
This week, the most watched news by investors was the outbreak and spread of swine flu. So far, there is no evidence indicating that the spread of swine flu has accelerated. The virus continues to spread, with more countries reporting cases. The WHO has raised the alert level to Level 5. For the currently struggling global economy, the swine flu outbreak is undoubtedly adding insult to injury. Tourism, industry, food, and other sectors will be among the first affected. Meanwhile, the public panic caused by the outbreak will severely impact economic recovery. Overall, this adds uncertainty to the future development of the global economy.
Looking ahead, the May market situation will involve more variables. First, the most basic factors affecting the market—credit funds—whether the credit scale can sustain and reach the previous levels, and whether the authorities will strictly monitor the flow of funds, will directly impact the market in the coming period. Secondly, various rumors will continuously stimulate investors, such as the resumption of IPOs, margin trading, and stock index futures, which are potential cards held by the regulators. Thirdly, the most important factor remains the direction of macroeconomic development, which is the decisive factor influencing market development. Lastly, the swine flu outbreak as a new variable, its future developments need to be closely monitored.
To sum up, we believe that the direction of the market next month is not yet clear, so investors should focus on individual stock investment opportunities. With the disclosure of annual reports and quarterly reports completed, some stocks with significantly improved performance and sustainability will attract incremental funds' attention. Central SOE restructuring, Expo countdown anniversary, environmental protection and energy conservation support, etc., as theme investments, will all attract capital pursuit, especially multi-theme Shanghai local stocks, which deserve particular attention. Their market performance last Friday already fully demonstrated their strength. We recommend paying attention to underperforming stocks within this group, such as Jiu Long Mountain (SHSE: 600555). Its parent company mainly develops and operates the Jiu Long Mountain Tourist Scenic Area, featuring a beautiful environment combining mountains, sea, and islands. It integrates high-end yacht clubs, polo fields, Westin hotels, shopping streets, etc. Since the Shanghai Expo lasts six months from May 2010 to October 2010, it will bring a large number of visitors to Shanghai and surrounding areas. Being only an hour away from Shanghai, the Jiu Long Mountain scenic area will significantly benefit. The stock has been trending upwards along the 6-day moving average since the beginning of the year. Recently, influenced by the broader market's deep adjustment, it quickly retraced to find support at the 6-day moving average, followed by a rapid rebound, forming a bullish three-line combination. Given the active performance of Shanghai Expo concept stocks, the stock's relative price is not high, with significant catch-up potential. It has the potential to challenge previous highs in the future and deserves close attention.
Guocheng Investment: Pre-Festival Market Aims High, Control Position Patiently Hold Stocks
The pre-festival final trading day unfolded as we expected, with a volatile consolidation pattern. Simultaneously, the market maintained stable volume without any significant surges or declines. Today's excessive surge in financial stocks prompted an adjustment, which is a normal occurrence. If the financial sector had surged too rapidly in the short term, it would have been our greatest concern. Thus, today's adjustment is necessary, accumulating energy for the market to reach new heights in the future. Regarding the pre-festival market, historical truths reveal that the vice editor of Xinhua News Agency and the truth party are excitedly spreading propaganda. Investors can control their positions and patiently hold stocks!
This week's market dynamics showed some subtle positive signals. On Monday and Tuesday, the only bright spot in both markets was the short-term speculative capital exploiting the global spread of swine flu, leading to rampant speculation in pharmaceutical stocks. The pharmaceutical sector topped the gain list for two consecutive days. However, on Wednesday, pharmaceutical stocks collectively declined, with severe polarization among individual stocks. Nevertheless, market highlights re-emerged with "financial and real estate" sectors jointly supporting the market, propelling the market out of bilateral trends on Wednesday. Meanwhile, power equipment and new energy stocks performed relatively actively. On the final trading day before the festival, individual stocks remained relatively active, with the real estate sector demonstrating a certain degree of continuity. This indicates that this week's market displayed "relative continuity in volume and sector highlights," revealing signs of stabilization in the market. Moreover, with the World Health Organization raising the swine flu alert level again to Level 5, indicating the current epidemic remains severe and uncontrolled, there is a possibility of further expansion. Stocks related to the swine flu epidemic still have opportunities. Short-term opportunities in bio-pharmaceutical sector stocks remain, warranting continued attention. However, caution is advised as risks arise from rising prices, and appropriate position adjustments are recommended.
Sectors to watch post-festival include: finance, new energy, power, steel, and for aggressive investors, bio-pharmaceutical themed stocks. The steel industry shows signs of bottoming out in the first quarter. According to the latest statistics provided by the China Iron and Steel Association, among the 72 large and medium-sized steel enterprises included in the statistics, product sales revenue in the first quarter of this year reached 449.95 billion yuan, a year-on-year decrease of 21.74%; realized tax and profit amounted to 12.363 billion yuan, a year-on-year decrease of 3.7%; realized profits showed an overall loss of 3.3 billion yuan, forming a stark contrast with the 44.16 billion yuan profit achieved in the first quarter of the previous year. However, there are clear signs of shrinking losses on a sequential basis. Whether the second quarter can turn profitable is worth watching! Future market opportunities can be appropriately grasped; additionally, electricity price reform is inevitable, and power stocks still carry favorable expectations; if the market sets new highs, opportunities in financial stocks will inevitably emerge, and the current expectation for a reduction in loan reserve requirements is relatively strong.
In summary, although the May market faces numerous uncertainties, such as the pressure from the expiration of lock-ups in the SME board, weakening economic stimulus expectations, and reduced likelihood of policy intensification, the possible significant contraction in the scope of credit growth has already been anticipated by the market and sufficiently reflected in stock prices. The future market trend will continue as a technical rebound at the daily line level driving a mid-term recovery at the weekly line level. Therefore, investors can actively pay attention to the changes in the weekly technical indicators to determine the future market trend. Generally speaking, the post-festival market trend aims high.
Chongqing Dongjin: Opportunities in the Second Quarter Come from Two Aspects
This week marks the conclusion of the disclosure work for listed companies' 2008 annual reports and 2009 first-quarter reports. Statistical data show that in the first quarter reports already disclosed in both markets, listed companies collectively realized net profits exceeding 66.6 billion yuan, achieving overall profitability. This aligns with market expectations. The warming of the first-quarter data was mainly driven by government policies and investments, evident from the rapid rise in central enterprise performance. Only when a wide range of central enterprises show widespread recovery can it be said that the Chinese economy has truly emerged from the bottom. Therefore, the sustainability of overall profitability for listed companies still needs observation.
According to Wind statistics, as of April 27, a total of 1,000 listed companies in both markets had disclosed their first-quarter reports, realizing a total net profit attributable to the parent company's shareholders of 66.6 billion yuan, a year-on-year decrease of 25.7%; compared to a loss of 690 million yuan in the fourth quarter of last year, they achieved a turnaround in profitability. The weighted average earnings per share of these 1,000 companies were 0.7 yuan. Compared to the cumulative loss of over 600 million yuan in the fourth quarter of last year, there was a noticeable improvement. The one increase and one decrease in year-over-year and quarter-over-quarter comparisons indicate significant fluctuations in the macroeconomy over the past half-year, suggesting that a series of economic stimulus policies have indeed altered the trajectory of economic operations. Nine industries showed year-over-year increases in the first quarter, with textiles, apparel, medical biology, and financial services seeing net profit increases of over 3%.
Additionally, mid-year forecasts seem to better reflect the trends in listed companies' performance and the latest industry dynamics. Comparing recent mid-year forecasts, five industries—construction, biomedicine, transportation, electrical appliances, and agriculture—are expected to lead the way in mid-year recovery, with more than half of the companies in these sectors issuing positive outlooks. Clearly, industries with standout performances in the first quarter will continue to shine brightly in the mid-year reports, and these industries are all strongly supported by national policies. Industries with low business sentiment, such as non-ferrous metals, transportation equipment, steel, cement, automobiles, and comprehensive categories, have thus far issued no positive mid-year forecasts, with no companies in these sectors reporting positive outlooks.
Subsequently, the market valuation levels of small-cap and large-cap stocks exhibit structural differences. Large-cap stocks have appreciated faster, significantly exceeding the market average. Due to the rapid rise, some structural bubbles have appeared, primarily in theme stocks without substantial support. However, the valuations of large-cap blue-chip stocks such as finance, oil, and chemical agriculture remain relatively reasonable. Thus, overall, the valuation level of the large-cap segment remains stable, lacking significant bubbles. Valuation levels may converge in the