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Top 10 Brokers’ Strategies 2023
The recovery trend of A shares has been established from winter to spring
CITIC Securities: With the gradual emergence of three major inflection points, A-shares will gradually gather strength to rise in 2023, continuing the mid-term comprehensive repair trend that has started, and the upward momentum will be stronger after entering the second quarter
China Securities Investment Securities: A-share earnings are expected to grow slightly in 2023, risk appetite has been boosted, the market is gradually moving from a stock environment to incremental growth, and the overall index is likely to be a “little bull market”
Guotai Junan Securities, China Merchants Securities: In 2023, the A-share market will show an “N”-shaped trend, first up, then down and then up
Changjiang Securities: The main line of the largest allocation in 2023 will return to core assets
◎Reporter Wang Youruo
The A-share trading in 2022 has come to an end, and it will be a rather turbulent year for A-shares and even the global capital market. The Shanghai Composite Index finally closed at 3089.26 points, down 15.13% for the year; the Shenzhen Component Index and ChiNext Index fell 25.85% and 29.37% for the year, respectively.
Although the overall performance of A-shares in 2022 is not satisfactory, it has laid a solid foundation for the valuation restoration in 2023: the optimization of epidemic prevention policies and the support of real estate policies have been clearly confirmed, and the economy has gradually stabilized and recovered; major European and American economies have raised interest rates. At the end, the marginal improvement of overseas liquidity.
In the outlook of the top ten top brokerages for the market in the new year, risk appetite has been significantly boosted, A-shares have gradually gathered strength to rise, and even a considerable level of rebound at the index level has become the “2023 consensus” of most institutions.
winter to spring
The recovery trend of A shares in 2023 is established
Judging from the general trend, many unfavorable factors restricting economic development in 2022 will usher in relief in 2023, which will provide a good macro environment for the recovery of A shares.
CITIC Securities said that since 2022, the external geopolitical risk “black swan” superimposed on the global liquidity crunch “grey rhino” has led to a downward trend in economic growth expectations, and the global major equity markets have weakened significantly. At the same time, affected by repeated epidemics and real estate difficulties, the domestic economy has been running at a low and weak level. The overall valuation level of A shares has dropped sharply, and it is currently at a relatively low level in the past ten years.
But in 2023, it is expected that the above-mentioned multiple influencing factors will usher in a turning point. CITIC Securities believes that: first, in November 2022, the optimization of anti-epidemic policies and the development of real estate support have clearly defined the inflection point of policy expectations. And gradually appreciate, opening up room for valuation repair; Finally, in the second half of 2023, the inflection point of A-share earnings will appear, and the growth rate will be more flexible, laying a solid foundation for mid-term repair.
“With the gradual emergence of the above three inflection points, A-shares will gradually gather strength to go up in 2023, continuing the mid-term comprehensive repair trend that has started, and the upward movement will be stronger after entering the second quarter.” CITIC Securities said.
In its annual strategic outlook, China Securities Securities said bluntly that the A-share market has stood at a new historical starting point: In 2023, China will enter the post-epidemic era, the economy will recover, and A-shares will be on a mid-term upward trend after bottoming out for the second time. , strategically optimistic. It is expected that A-share earnings will increase slightly in 2023, risk appetite will be boosted, and the market will gradually move from a stock environment to incremental growth. The overall index is likely to be a “little bull market.”
The market trend may be “N” shaped
Spring market turmoil can be expected
In terms of market operation structure, top brokerages generally believe that the overall market trend will be deduced in stages, but in terms of specific trend forecasts, various institutions are slightly different.
Shenwan Hongyuan Securities conducted a three-stage deduction on the A-share market in 2023. The first stage is the “spring turbulence” market. The downside risk of the market is controllable. The second stage is after March and April of 2023. The market is in the period of prosperity verification. The global economic recession has caused the fundamentals of A-shares to fall, and A-shares will still fluctuate for a period of time. The third stage is after the second quarter of 2023, when the economic recovery will gradually materialize, supporting the second wave of rebound after the spring turmoil.
China Merchants Securities stated that in 2023, A-shares are expected to enter a mid-term reversal structural shock upward cycle. Starting from the end of 2022, the market trend may resemble an “N” shape. Guotai Junan Securities also believes that due to the complexity of the epidemic, economic recovery, and international games, the A-share market in 2023 will not be a smooth process, but will show an “N”-shaped trend, first up, then down, and then up.
In addition, a number of securities firms have given special reminders about the spring market in the first quarter of 2023.
CICC said that in terms of rhythm, from the end of 2022 to the first quarter of 2023, the epidemic and the marginal changes in real estate policies are expected to be relatively high, and the index may usher in a phased opportunity. Shenwan Hongyuan Securities said that the spring market can still be expected. Generally speaking, the downside risk of the A-share market in the first quarter is limited.
Funding is expected to get out of the stock game
In 2022, the sharp contraction of A-share risk appetite will cause the market to enter a state of capital stock game, but looking forward to 2023, institutions predict that market funds are expected to see a significant marginal improvement.
Industrial Securities said that overall, although the large losses in public offerings in 2022 have led to a significant slowdown in issuance, the redemption pressure is not heavy. Moreover, judging from historical experience, public funds have never suffered consecutive losses. If the yield of funds improves in 2023, fund issuance is expected to pick up.
At the same time, the positions of absolute income institutions such as insurance and private equity have also been at a historically low level and are expected to gradually recover. In 2023, with the mitigation of systemic shocks and the support of economic recovery, capital market funds will improve marginally compared with 2022, and gradually get out of the stock game.
Haitong Securities believes that in 2022, overseas central banks represented by the Federal Reserve will sharply tighten monetary policy, and the repeated rise in U.S. bond interest rates will have an impact on the sentiment of the A-share market. In 2023, U.S. inflation is expected to gradually fall, and the fastest pace of Fed rate hikes may have passed, so disturbances from U.S. bond interest rates may be marginally alleviated.
With reference to historical experience, U.S. inflation may still be in a downward cycle in 2023. With the easing of inflationary pressures, the Fed’s interest rate hike cycle may end, and U.S. bond interest rates will therefore peak, and overseas liquidity is expected to usher in a clear inflection point of marginal improvement .
“In 2022, under the pressure of geopolitics and tightening overseas liquidity, the net inflow of foreign capital into A shares will be significantly lower than in previous years. In 2023, it is expected that my country’s economic fundamentals will improve steadily, and the interest rate of US bonds may usher in a trend turning point. Foreign capital is expected to return to the A-share market.” Haitong Securities said.
The Return of the King of Core Assets
Or is track investment breaking out again?
In terms of market style research and judgment, the value style represented by big consumption and the growth style represented by booming track stocks have once again become the main points of controversy among institutions.
Changjiang Securities believes that the main line of the largest allocation in 2023 will return to core assets: the phased recovery of real estate and consumption will greatly catalyze the market’s expectations for a comprehensive recovery, and core assets may fully return to institutional heavy positions.
First of all, from the perspective of economic advantages, the profit growth rate of core assets has been revised upwards, while the main growth track direction has begun to slow down in 2023; secondly, the current position of core assets is low enough that the valuation of Mao Index in this round has fallen by more than 40% , the valuation of some targets is even far lower than the valuation center after 2018; thirdly, the current allocation ratio of public offerings to core assets has dropped to the level at the end of 2018, and the degree of congestion in institutional positions has been significantly reduced. Therefore, Changjiang Securities recommends that investors allocate more large-cap value stocks in 2023.
China Securities believes that when reflecting recovery expectations and stable growth expectations, the value of the broader market will be staged, but as time goes by and the economic environment becomes clear, the medium-term main line represented by the growth style will eventually prevail.
Tianfeng Securities is also optimistic about investment in the prosperity of 2023. It believes that in the environment of economic hard landing and systemic risks being gradually eliminated, and the economic recovery is weak, the A-share index will fluctuate as a whole, but structural opportunities will be highlighted. The outstanding performance of these structural sectors comes from the outbreak of performance, that is, boom investment.