News and analysis

Optimism in the market is hard to fall


Before the festival, due to the tightening and cautious mood of the funds, the market trading atmosphere was very light, and the market index fluctuated in a narrow range. After the long holiday during the periphery stock market's rise and fall of the central bank must, in September the official PMI overall strong on the surface of the positive stimulus, such as market quickly warmed and multiple consecutive trading days up. On the whole, from the perspective of economic expectations, market liquidity expectations, risk appetite and seasonal statistics, we believe that October will be a good time window for multi-cost performance.

The third quarter is expected to trigger a "silver ten"

According to the national bureau of statistics, according to data released in September China's official PMI index recorded a 52.40%, 0.7% higher than in August, rising for two months in a row, and record since May 2012, show that in the manufacturing industry to maintain the stability to the good development momentum. In addition, the official non-manufacturing PMI for September was 55.4%, the highest since June 2014, and also pointed to a relatively high level of domestic macro economy. In addition, look from the manufacturing PMI sub-index, multiple disciplines indicators have bright eye, production and new orders index were 54.7% and 54.8% respectively, 0.6 and 1.7% higher than last month, are the highest in recent years; The new export orders index was 51.3 per cent, up 0.9 percentage points from the previous month. Production and internal and external mutual positive again confirm in July and August economic indicators belong to short-term volatility rather than falling trend downward, after a short downturn that domestic economy continues to recover. Going forward, even in the context of real estate investment growth is unsustainable, we still believe that, with the expected manufacturing activity better and external demand to revive, macro economic resilience will continue, economic steady growth for the better in the inner base has been further consolidated.

After the "11" long holiday, the 2017 ipo will be officially "unveiled", and all three quarterly reports must be disclosed by October 31. Flush iFinD statistics, according to data from has disclose third-quarter earnings forecast of 1360 listed companies, more than 75% of the listed companies is expected this year three quarterly earnings "xi" (" xi "includes, slightly increased, renew surplus, turnround four types). If measured by net profit margin, the net profit growth of the Shanghai and shenzhen Shanghai and shenzhen stock markets increased by about 37 percent in the third quarter, and the growth rate in the second quarter (total A non-financial) was up 14.4 percent, which was clearly better than the market expectation. From the historical experience, whenever the company's earnings disclosure season approaches, the market probability of a wave of "speculation" window will be welcomed. Macroeconomic resilience, we think, continue, followed by gradually disclosed three quarterly reports of listed companies, the market is expected to be hot rotation, back to the three quarterly reports its "xi" plate, three quarterly reports once again set off silver ten "quotation" is possible.

The end of the quarter has passed

In addition to the positive signals emitted from the fundamental level, we also observed positive improvement in post-holiday market capital and investors' risk appetite. In terms of liquidity, as the point and the end of the central bank assessment of MPA at the end of the first market financing area tight condition obtained the certain change, reflect the bank financing area tension between bank pledged repo rate and Shibor rates are different degrees of decline. In addition, during National Day, the central bank issued a notice to support financial institutions to develop the inclusive finance business and to implement "targeted and targeted policies" for commercial Banks eligible. While the market for the central bank "directed down policy" liquidity forecast released by large differences exist, and the effect of time also have to wait until 2018, but this kind of rare "trailer type" policy release a positive signal to the market, to a certain extent, also help to improve the post-holiday tight liquidity in the market continue to expectations.

Market risk appetite has picked up significantly

With the closing window period approaching, the policy dimension is expected to become the market theme. Before the festival, the CSRC also held a video meeting of the whole system, which was to be deployed to meet the work of the party's 19 major tasks, and put forward the efforts to ensure the smooth operation of the capital market. That would give the market some expectation, at least from a policy level. In this context, the active funds of various roads also began to be agitated after the holiday, and the increase in the financing balance of the two cities and the amount of capital in the north were fresh to a New Year's high. In the first trading day of the National Day holiday, the balance of capital raising in both markets rose by 15.825 billion yuan in a single day, a record high for the year, according to exchange data. At the same time, north funds accelerated into the A shares, Shanghai deep shares, after the first day of net purchases of 4.675 billion yuan and 2.889 billion yuan respectively, from first by A sharp increase in both the highest single to net purchases this year record. Two financial balance and money after first decline in north, started after continuous influx, to explain the risk preference of market investment and trading atmosphere has significantly improved, a period of time in the future market is optimistic expectations.

According to the seasonal statistics, the statistics of the past 10 years show that the whole of October has seen a significant rise and fall, with seven years in the past three years, and the average rise of 2.12%. Overall, the economic fundamentals are relatively stable, the enterprise profit good, market financing area is expected to improve, superposition of improved risk appetite and seasonal historical statistical rule, multi-factor resonance is doing much better cost performance decided to October time window, stock index also large probability will usher in "red October".

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