Goldman Sachs: The National Team Has Spent 900 Billion Yuan To Support The A Share Market.

The national team has spent 900 billion yuan to support the A share market. Taking into account the fact that the national team still has sufficient liquidity, it is expected that the market volatility will tend to be mild. Because the market is not stable and the government is not in urgent need of the funds, the possibility of the rapid withdrawal of the national team is also very low.

Gao Hua analyst Liu Chenjie and others said in yesterday's report that the national team may have spent 8600-9000 billion yuan to support the Chinese stock market in 6 and July, equivalent to 1.6% of the total market value or 2.2% of the market value of circulation.

The following is a report from Goldman Sachs:

1. we expect that the national team has spent 860 billion to 900 billion yuan to support the A share market.

Our prediction is based on the following two aspects: 1., based on the top-down analysis of our liquidity model; 2., the bottom-up analysis of the changes in the capital flows of major investment channels based on the public information reported by the relevant media.

(1) top-down approach: this method shows that the national team buys about 900 billion RMB assets in the market.

(2) bottom-up approach: if we add up each channel, the national team has bought about 860 billion RMB assets.

2. the possible size, investment direction and shareholders of the national team:

(1) the "national team" can support the market with a size of about 2 trillion yuan (including those already paid).

According to media reports such as Sina and financial network, 17 commercial banks have provided a total of 1 trillion and 300 billion yuan to China's securities and financial Limited by Share Ltd.

China issued a total of about 2 trillion RMB yuan through issuing bonds, plus the central bank's liquidity injection.

It seems that the government has enough financial support.

(2)

The focus is on big blue chips and defensive boards.

Due to the lack of high frequency data on the flow of funds between the various sections, we will select the performance of the sector from the end of June to the beginning of July, and conclude that the capital flows to the large blue chips and some banks, insurance, catering services and health care sections.

According to media reports and listed company reports, "national team" has invested in some gem and

Although these investments account for only a small part of the overall bailout plan.

(3) those entities holding stocks? Based on the information displayed by the media, "national team" buys stocks through three channels: 1., the Chinese certificate company buys directly (at least 400 billion RMB); 2. subscribe to some major mutual funds (valued at about 200 billion RMB); 3. China certification company has provided credit lines for some brokerages.

(valued at about 260 billion RMB).

3. short-term market impact

(1) potential index trading range in the short term

Considering that the "national team" still has sufficient liquidity, we expect that the market volatility will tend to be moderate, and A shares will find a supporting position at about 3500 (about 3400 points of the Shanghai and Shenzhen 300 index).

On the other hand, media reports say that regulators are discouraging institutional investors from reducing their positions before the Shanghai composite index reaches 4500 points (about 4600 points of the Shanghai and Shenzhen 300 index).

Therefore, the 4500 point is now widely regarded as the upper limit of market performance in the near future.

Once the index exceeds this level, we think investors like broker dealers will reduce their positions.

(2) the market is worried about the withdrawal of the national team from the rescue market.

We think the possibility of exiting the national team is very low because the market is not stable and the government does not need the funds.

In addition, there were two examples showing that the government's direct or indirect bailouts would continue for a long time. In 1998, during the Asian financial crisis, the Hongkong monetary authority's bailout continued for four years, and the Federal Reserve began its first round of quantitative easing policy since the end of 2008. It did not begin until 2013.