洪灝|牛市归来了吗?(Is the Bull Back?)

这是我们20200705的报告《洪灝|牛市归来了吗?》的英文原版。感谢阅读。

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The Shanghai Composite (SHCOMP) surged almost 6% last week to a new high YTD, about 4% above its 850-day moving average (Figure 1). My forecast for the trading range for the SHCOMP up to the first week of November was at 2700 – 3200. Since our outlook report “Going the Distance” on November 10, 2019, the SHCOMP has been trading between 2,647 and 3,152. It seems that another good day will easily nudge the SHCOMP over the top end of our forecast range.

Figure 1: The Shanghai Composite has surged pass its 850-day mavg.

Source: Bloomberg, BOCOM Int'l estimates

Pundits are attributing the surge to the first cut in rediscount loan interest in a decade by the PBoC during the Dragon Boat Festival. The consensus believes that now the central bank’s tenor of monetary policy has changed to the regime of “loosening credits while maintaining control of money supply”. And consensus has also alluded to my economic cycle theory of 850-day moving average. 850 days equal the number of trading days in a 3.5-year short cycle, and the moving average line derived from my economic cycle theory has been working well, indicating important inflection points on the SHCOMP (Figure 1). As such, consensus is bullish.

But credit and money supply data are painting a different picture. While both total social system financing and M2 have accelerated and surprised positively, the velocity of the changes in these two monetary statistics has been consistent since early 2018. Historically, the growth difference between credit and money supply has been a consistent indicator of the SHCOMP’s performance. Given the even-kilted speed since early 2018, it is one of the key reasons why the SHCOMP has been stuck in a trading range (Figure 2). 

In the coming months, we believe that CPI will continue to trend lower, giving some leeway for the PBoC to continue easing. Thus, credit and monetary supply will continue to be supportive for the SHCOMP. As China’s financial market will continue its accelerated “Reform and Open”, more foreign capital will find the Chinese market attractive, especially given the expensive US equity valuation and declining yield environment. 

When we publish our recent report “Strong Man of Asia: Market Has Reached an Inflection Point” on April 19, 2020, we highlighted the long-term opportunity in Chinese mainland market and Hong Kong. Since then, both market has performed strongly, despite ugly headlines recently. While we remain constructive on China and HK, and we saw this long-term opportunity well ahead of consensus, we will keep our heads cool, especially in a market getting too excited too quickly without properly deciphering the macro data. 

In our second half outlook report “The Dragon Awaits” published on June 10, 2020, we again recommended the long-term opportunity in both A shares and Hong Kong. Both markets are starting to offer long-term value. Meanwhile, our quantitative analysis suggests that value has significantly underperformed growth to the extreme. As such, value and beaten-up cyclicals should start to outperform. In the eyes of a value investor, there are opportunities everywhere.

Figure 2: Credit expansion has not accelerated vs. money supply.

Source: Bloomberg, BOCOM Int'l estimates

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洪灝,CFA

交銀國際

2020.07.06

雪球转发:2回复:2喜欢:2

全部评论

理财幼儿小班小C07-08 15:59

d倒是都看完了,但是没有特别明确,是不是牛市。
b不过老师倒是已经推荐A股和港股了,应该说的是牛市吧

Hannah宝宝07-06 08:41