China Southern’s return to New York is symbolic
Last week, the market opened sharply due to the impact of the epidemic in the Mainland, but it staged a big reversal on the same day. After that, the index went up repeatedly. The Hang Seng Index finally closed at 18,675 points; the State Index closed at 6,368 points; For the whole week, the Hang Seng Index rose by 1102 points; the KCI rose by 378 points; Haidilao (6862) and Ali Health (241) rose 46% and 30% respectively this week, making them the top two blue-chip stocks with the best performance.
There were two major shifts in the stock market in November. First, peripheral interest rates began to show signs of peaking. Data showed that the pace of rising inflation slowed down. The Fed began to turn dovish in order to reduce the risk of a hard landing. The latest non-agricultural jobs increased by 263,000, far higher than market expectations, and the unemployment rate remained at 3.7%. However, investors are worried that the strong employment data may affect the Federal Reserve’s slowdown in raising interest rates. The three major US stock indexes closed last Friday. The index closed at 34429 points, up 34 points; the index closed at 4071 points, down 4 points; the Nasdaq closed at 11461 points, down 20 points. Employment receipts are lagging figures. Judging from the performance of U.S. debt, the market tends to believe that U.S. debt will peak at around 5%. Instead, the future focus will be on whether there will be a recession.
Another factor that has a greater and more direct impact on Hong Kong stocks is whether the mainland’s epidemic prevention will be relaxed, which seems to have become the general direction. Entering December, the mainland has turned 180 degrees, significantly relaxing epidemic prevention measures, stopping large-scale lockdowns, stopping the closure of the retail industry due to the epidemic, and reducing the impact on social and economic operations.
Since the beginning of this month, China Southern Airlines (1055) has resumed flights from New York to Guangzhou. This resumption of flights is seen as promoting international air travel and building a bridge between China and the United States. The share price of China Southern Airlines has performed mediocre this year, closing at 4.39 yuan last week, not far from the low of 3.83 yuan. The group lost 6.1 billion yuan in the third quarter ended September 30, an increase from the 1.4 billion yuan loss in the same period last year.
Investors have speculated on aviation stocks from time to time in the past two years, but due to the delay in customs clearance, it is difficult to taste the sweetness. Let’s see if mainland aviation stocks can really take off this time.
While mainland and international connections have gradually resumed, the mainland has reduced restrictions on the flow of people within the country. The buses and subways in Guangzhou, Tianjin, and Chongqing no longer check for negative nucleic acid test certificates. You only need to show a green health code to board the bus. The Beijing Transportation Commission stated that starting from the first train on Monday, Beijing’s bus and subway operators shall not refuse to board passengers without a 48-hour negative nucleic acid certificate when verifying health information. This move shows that the practice of regular and comprehensive nucleic acid testing in the mainland has come to an end.
The National Development and Reform Commission holds meetings of six major provinces and cities
Reducing economic disruption from the epidemic is an important step in resuming production and daily routines. At the same time, various places began to focus on promoting the development speed in the coming year. According to the State Council’s city scale classification standard, the highest level of China’s urban hierarchy is the super-large city, with a permanent population of more than 10 million in the urban area, and the four major cities of Beijing, Shanghai, Guangzhou and Shenzhen are the focus of economic promotion. According to news from the official website of the National Development and Reform Commission, on the followingnoon of November 30, the National Development and Reform Commission held a “Look Back” video work meeting to supervise the construction of funds to support major projects and policy measures to stabilize the economy.
The video conference connected 6 project construction sites and listened to the project progress report; Beijing, Shanghai, Anhui, Guangdong and other 4 provinces and cities introduced the implementation of the implementation of the fund to support the construction of major projects, a basket of policies for stabilizing the economy, and the implementation of subsequent policies. , Chongqing City introduced the progress of the fund project. Judging from the supervision situation, Beijing, Shanghai, Anhui, Guangdong, Chongqing and other five provinces and cities worked overtime and extra conventional operations, focused on strengthening the guarantee of project elements, and took effective and effective measures to promote the start of construction of all fund projects as scheduled.
The meeting pointed out that the economic operation in the fourth quarter is very important to the economy of the whole year. Now is the key time point to consolidate the economic stability and upward foundation. Efforts were made to implement various measures to stabilize the economy and actively release the effectiveness of policies. The coordination mechanism must continue to operate efficiently, accelerate the progress of project construction and fund payment, strive to form more physical workloads, and give full play to the policy effects of policy-oriented developmental financial instruments; at the same time, strengthen the supervision and management of fund projects. It was also emphasized at the meeting that relevant localities should seize the time of the last month of this year, continue to implement a package of policies to stabilize the economy and follow-up policies, promote the healthy and stable development of real estate, do a good job in stabilizing employment, and strive to consolidate economic recovery and development. It will make a positive contribution to the stabilization of the economy in the fourth quarter. It can be seen from this that the central government did not wait for the start of next year, and has already started in the last month. It is estimated that there will be frequent moves in the future, so as to achieve early results.
Hong Kong stocks have experienced an unusual year this year. First, the Russia-Ukraine war pushed up global energy prices, oil stocks, coal stocks, and shipping stocks soared, followed by high inflation that had not been seen in 40 years, which led to violent interest rate hikes in the United States. With global growth gradually entering a plateau, it is hard to imagine that interest rates can rise at this rate, resulting in a sharp contraction of global asset values. At the same time, Hong Kong stocks were even more troubled by the continuous epidemic in the mainland. It was due to domestic and foreign difficulties that the Hang Seng Index plummeted in October, breaking through 15,000 points at a low level. The valuation is almost the lowest since the reunification. This abnormal climate is quite difficult to overcome. Large countries such as the United States have difficulty breathing under high interest rates. At the same time, China has been disrupted by the epidemic, and its growth has fallen to the lowest level since the opening up and reform. Both countries have an urgent need for change. A signal of a policy shift.
Great climate anomalies are difficult for both China and the United States
The biggest threat to inflation in the West is the war between Russia and Ukraine. From the perspective of the current war situation, both Russia and the West are quite tired. Energy prices began to stabilize in the fourth quarter. Although the situation has not yet stabilized, inflation seems to be lacking. power.
Last month, the heads of state of China and the United States met. After the meeting, there was no longer a war of words, and a visit to China by US Secretary of State Blinken was arranged. The relationship between the two countries seems to be easing. For the two major countries, the situation of détente is good for each of them to deal with internal difficulties. From several perspectives, whether it is interest rate policy, epidemic prevention policy, or international geopolitical relations, they have gradually returned to normal from abnormal to varying degrees. If this trend continues, asset valuations, including stocks, should turn from abnormal to normal.
Price-to-earnings ratios remain historically low
The Hang Seng Index has fallen to the level of 15,000 points. The valuation and dividend payout must have deviated from the normal level. The valuation is ultra-low and the dividend payout is super high. Even following this round of rebound, the valuation is still not expensive. ) as an example, last week it closed at 18.77 yuan, with an interest rate of 3.4%. Tracker Fund’s constituent stocks include many growth-oriented tech stocks Meituan (3690). The company will retain profits for further development, and the rest of the funds will distribute dividends. Therefore, even if shareholders receive dividends for consumption, theoretically they have reserved funds to maintain future dividend growth, which is very attractive for investment income.
When the Hang Seng Index fell nearly 20,000 points, investors felt that the low water level was already very low. However, as the index fell by one level, investors were afraid that 20,000 points would be unattainable. According to market performance, the Hang Seng Index fluctuates around 23,000 points until the U.S. interest rate rises before falling below the main threshold. If the U.S. interest rate peaks next year, the Hang Seng Index should normally rise back to this level. You can consider buying goods in sections and wait for the situation to return to normal.
Jin Riku
