China Merchants Securities Zhou Celve: Policy Signal Confusion &Nbsp; Lack Of Opportunity For Improvement

In the next one or two months, the economy is in a stagflation stage with cyclical fluctuations.

Affected by the European sovereign debt crisis and the new property market in April, the domestic economic downturn in the two or three quarter has been basically determined. On the other hand, inflation is lagging behind the growth of economic growth, so the inflation peak is estimated to take one or two months.

Therefore, the economic situation in the next one or two months is a bit similar to a slight stagflation, which will not last for a long time.

However, according to the experience of stock market at different stages of the economic cycle, it is difficult to improve the stock market at this stage.

Recent policy signals are rather confusing.

Two weeks ago, the policy signals were showing signs of warming, but the recent policy signals were swaying, which may reflect the judgment of the macroeconomic management department on the future economic situation.

In addition, we suspect that even if inflation falls back in the future, the government may not be able to relax the macro policy space. After all, it can not stimulate the economy as vigorously as last year.

What the government can do in the future may only be to promote structural adjustment and economic pformation more vigorously. Therefore, in the medium term, we need to pay attention to the structural adjustment policy and its cumulative effect when it will come into effect.

We maintain that the market is not far from the bottom but the opportunity remains to be judged.

Last week, the market valuation level further approached the historical low. The Shanghai and Shenzhen 300 dynamic price earnings ratio dropped to 13.38 times, and the net market rate dropped to 2.33 times, further to the bottom of the historical valuation.

However, from the economic fundamentals and macro policies, the stock market still lacks opportunities for improvement.

Therefore, we have generally maintained the judgement of the past two or three weeks. The market may not be far from the bottom, but the opportunity still needs to wait. Even the possibility of building a V sharp bottom is unlikely.

In terms of industry, the real estate related industry chain is still cautious. It suggests that we should pay close attention to the pharmaceutical, food and beverage, hotel and tourism businesses and other industries with stable growth prospects.

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