Shanghai Index Soars 9% in 3 Days: Big Data Reveals Top Opportunities Ahead
After many years, the Shanghai Composite Index (SSE) has once again experienced a surge of over 4%, with the first-tier heavyweight stock, Kweichow Moutai, also rarely closing with a nearly 9% rebound in trading volume.
Looking back at history, there have been many trading days where the SSE has risen by more than 4%. In terms of timing, most of these occurred during upward market trends, with some corresponding to the bottoming stages of the market. For the present, institutions believe that the market is presenting turning point opportunities, and the value of allocating heavyweight and thematic stocks is increasing.
The market has welcomed several positive factors. Recently, the index has seen a strong rebound from a low position. For example, on September 24th, both the SSE and Shenzhen Component Index rose by more than 4%, and the ChiNext Index increased by more than 5%. Among them, the SSE achieved the largest single-day gain in nearly four years. On September 25th, the intraday gains of the three major indices all exceeded 3%. On September 26th, the market continued to see a strong rise, with the SSE gaining more than 3% and breaking through the 3,000-point mark! The cumulative increase over the three trading days from September 24th to September 26th exceeded 9%.
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The market also presented a significant signal: trading activity has greatly increased, and turnover has notably expanded. On September 24th, the transaction amount for the entire A-share market reached 974.4 billion yuan, an increase of over 70% compared to the previous trading day. On September 25th, the total turnover for all A-shares further increased, breaking through the trillion yuan mark, reaching 1,161.6 billion yuan.
Under the overall "volume and price rise" in the market, industry sectors also collectively boiled over. Observing more than 30 industry sectors, all welcomed increases on September 24th, with food and beverages, steel, coal, and non-bank finance all rising by more than 5%; agriculture, chemical, environmental protection, electronics, banking, building materials, and others all increased by more than 4%.
With the overall warming of the industry, there have been several significant positive factors in the market, such as policy. On September 24th, the State Council's press conference revealed several favorable measures, such as lowering the reserve requirement ratio by 0.5 percentage points in the near future, providing about 1 trillion yuan in long-term liquidity to the financial market; reducing the existing housing loan interest rates and unifying the minimum down payment ratio for housing loans, guiding commercial banks to reduce the existing housing loan interest rates close to the newly issued housing loan interest rates. In addition, new monetary policy tools are being created to support the stable development of the stock market.
Beyond the policy front, there are also several positive factors emerging in the market, including the "volume and price rise" mentioned above, as well as a significant increase in trading activity in several main lines such as large-cap stocks and restructured stocks, and the continuous increase in the number of delisted stocks.
Looking at large-cap stocks, nearly 20 large-cap weighted stocks with a market value of over 500 billion yuan, including Industrial and Commercial Bank of China, Kweichow Moutai, Agricultural Bank of China, PetroChina, and China Mobile, all rose on September 24th, with an average increase of more than 4%. China Merchants Bank and China Shenhua both saw gains exceeding 5%. The "Mao Index," representing some leading companies in consumer, pharmaceutical, and technology sectors, rose by 4.30% that day. It is worth mentioning that, except for some targets, most heavyweight stocks have experienced a rebound after a long-term correction.
Additionally, the theme of mergers and acquisitions has continued to heat up. Recently, the number of mergers and acquisitions by listed companies has been increasing. Previously, the mergers and acquisitions of central state-owned enterprises have attracted market attention, and recently, the mergers and acquisitions of some non-central state-owned enterprises have also been continuously heating up.Companies like Yonghui Superstores saw their stock prices hit three consecutive daily limits from September 24th to September 26th, stimulated by the news that Miniso was planning to invest 6.3 billion yuan to take a controlling stake. Shuangcheng Pharmaceutical, which is planning to cross-industry merge and acquire semiconductor assets, has also been stimulated by this news, and the company's stock price has continuously hit ten "one-word" daily limits from September 11th to September 26th...
As the market continues to evolve through the process of survival of the fittest, the number of delisted companies is increasing. On September 20th, *ST Meishang was delisted, and Haiyin Shares, ST Dinglong, and *ST Shen Tian also all delisted in September. Wind data shows that nearly 50 A-share companies have completed delisting this year.
The Shanghai Composite Index (SSE) has seen multiple instances of over 4% increases in the past decade.
Looking back at history, the SSE has also experienced several instances of single-day increases exceeding 4%. According to incomplete statistics from Wind, there have been 16 trading days since 2014 where the SSE has risen by more than 4%.
Upon further examination, trading days with SSE increases of over 4% are mostly concentrated in 2015, such as January 21, 2015, June 1, 2015, June 30, 2015, and July 9, 2015. In addition, on February 25, 2019, and July 6, 2020, the SSE also saw increases of more than 4%.
Upon further examination, instances of SSE increases exceeding 4% generally correspond to the following market nodes:
Firstly, the market is in a strong upward phase. For example, on January 21, 2015, the SSE increased by 4.74%, and prior to this, from October 28, 2014, to January 20, 2015, the SSE had accumulated an increase of nearly 40%. Following this, from January 22, 2015, to April 27, 2015, the SSE continued to rise by 36%.
Another example is July 6, 2020, when the SSE increased by 5.71% on the day. Prior to this, the SSE had already begun to rebound, with an accumulated increase of over 18% from March 24, 2020, to July 3, 2020. Following this, the index continued to rebound, with the SSE fluctuating upwards for over half a year from July 7, 2020, to February 19, 2021, accumulating an increase of 10% during this period.
It is worth mentioning that during this phase, the central bank also took actions to lower reserve requirements. In April 2020, the central bank decided to implement targeted reserve requirement reductions for small and medium banks, lowering the reserve requirement ratio by 1 percentage point, releasing approximately 400 billion yuan in long-term funds.Secondly, corresponding to the market bottom nodes. For instance, on October 22, 2018, the Shanghai Composite Index (SSE) rose by 4.09% on the day, closing at 2,654.88 points. At that time, the market index was generally at a phase bottom, and after that, the SSE experienced over two months of horizontal fluctuation from October 23, 2018, to January 3, 2019. From January 4, 2019, to April 19, 2019, a strong rebound occurred, with the SSE cumulatively increasing by more than 30%.
Weight "sets the stage" and theme "performs the play"
Comparing the current market with that of October 2018, there are some similar characteristics, such as both being at a phase low and having experienced a long period of adjustment beforehand.
Looking back at the performance of various sectors during the SSE rebound after October 22, 2018, it generally showed a trend where weights "set the stage" and themes "perform the play."
Statistics indicate that during the SSE rebound from January 4, 2019, to April 19, 2019, all 31 major industries of the Shenwan classification achieved gains, with sectors such as agriculture, forestry, animal husbandry, and fishing, coal, food and beverages, home appliances, computers, non-bank finance, and electronics all seeing increases of more than 50%.
During this period, many leading companies in various industries took the lead strongly. For example, Wuliangye in the food and beverage sector saw its stock price double; Gree Electric in home appliances rose by more than 80%; and in the computer sector, Dazhihui's stock price more than doubled. Additionally, the stock prices of several other companies also doubled during this time.
In conjunction with the latest market trends, many companies that previously led the market have recently rebounded. For instance, in the computer sector, Tonghuashun, an internet finance company, saw its stock price rise by 12% on September 24, and on September 25, it continued to surge, reaching a peak increase of 8% during the day; Huilin Securities in non-bank finance rose by nearly 10% from September 24 to September 25.
Regarding the upcoming market opportunities, many securities firms have expressed optimistic views. For example, Zhongtai Securities stated that the series of policies announced at the State Council Information Office press conference may effectively boost market sentiment and repair market liquidity in the short term; Dongxing Securities believes that a medium-term bottom is likely to form.
For investment opportunities, securities firms believe that both weights and themes are expected to welcome new configuration values. For instance, Guotai Junan stated that the focus of the rebound is on low-value blue-chip stocks; Guohai Securities believes that industry configuration should focus on consumption + growth. On the one hand, the fundamentals of sectors related to home appliances, automobiles, and real estate chains are expected to be boosted; on the other hand, market valuations and sentiment are at a phase bottom, and subsequent hot technology directions such as autonomous driving and robots all have event catalysts, with growth technology benefiting first in a globally loose trading environment.