Before The Market: Technology Stocks Catalyzed The Structural Market China

Before The Market: Technology Stocks Catalyzed The Structural Market China

Date:May 13, 2020

Beijing, May 7 (economic daily news) -- the two markets opened lower on Wednesday, rising nearly 2 percent in late trading. Disk, the stock rose, the market strong, make money effect is better.


By yesterday's close, the Shanghai composite index was at 2878.14, up 0.63 per cent. The shenzhen component index rose 1.51% to 10883.22; Gem index at 2110.27 points, up 1.97%.


Analysts say the key word for the fundamental trend going forward is "recovery". With the end of the global economic shutdown, and with the support of unprecedented monetary and fiscal policies, it is expected that the global economy will recover, and the a-share market is expected to embrace "recovery bull". Science and technology stocks, which were dragged down by the epidemic in the early stage, have rebounded strongly. In terms of configuration, topics of science and technology such as 5G communication and building materials and infrastructure are also worthy of attention.


Institutional point of view


With the epidemic fully under control in China, economic activity has returned to normal, citic said. It is expected that the economy will pick up further in May than in April, especially as the two sessions begin on May 22 and policy support measures will be further implemented to support the economic recovery. Monetary policy will remain neutral and flexible, and fiscal policy will dominate the market. After the uncertainty of the first quarter is eliminated completely, the second quarter will be the biggest phase of year-on-year improvement and the best window period for investment in 2020. The first three industries were electronics, communications and computers. Secondly, the construction, building materials, transportation and other industries that benefit from counter-cyclical regulation also have considerable flexibility. Third, the early damage of the late recovery of the catering tourism and other industries will be restored.


Huatai securities expected, A stock market trend will still be volatile, but the market has been on the right. From the point of view of the marginal change of the supporting force and the suppressing force, the comparison of the amplitude of the change, the stage at which it is located, and whether it exceeds the expectation, the probability of the index center in May is larger than that in April. May configuration: both internal and external logic, both benefit from external demand from improved or external focus, and benefit from domestic demand policy support or economic advantage, existing three main export advantage - manufacture, autonomous control, optional consumption in manufacturing, based on ROE, domestic and foreign holdings in the view of the fundamental strategic tactical perspective screening, suggest to add with the three "electric" : electronics, semiconductor, component, PCB), power equipment (solar and wind power), household appliances (white goods, kitchen electric), continue to hold good "cloud" : on the right side of cloud infrastructure services, auto parts and electric car industry chain on the left side of the attention.


Guosheng securities pointed out that the three core logic will drive the market back to the main line of technological growth. First of all, the two sessions will be held on May 21 and 22, and the two sessions are often cost-effective before and after the window to do more. Especially this year, due to the delay in the NPC and CPPCC sessions, the performance period has passed, high-risk preference, high beta growth plate is expected to continue to dominate. Secondly, as the epidemic overseas has gradually reached an inflection point, the focus of the market is gradually shifting from the "resilience of domestic demand" to the "repair of external demand". The science and technology sector, which had been heavily dragged down by overseas, will be the most resilient. Finally, the gem registration system reform not only for the medium - and long-term development of science and technology to set the tone, but also is expected to catalyze the short-term structural market

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