The Most Intense Stage Of Financial Supervision Has Passed: Small Rebound Does Not Change The Pattern Of Observation Period.

Market continues to differentiate, risk appetite still needs to be repaired.

One week before the holiday, the market performance increased further. The Shanghai Composite Index rose 0.63% on 22-26 May, while Shenzhen's index fell 1.12%, and the gem index fell 2.3%.

Banks (5.37%), non silver (5.1%), coal (2.01%), household electrical appliances (0.42%), food and beverage (0.4%) were in the front, and defense industry (-4.01%), light industry manufacturing (-3.43%), machinery (-3.38%), and basic chemical industry (-3.35%) were on the back.

On the whole, on the one hand, the main line of market expectations is still unclear. Two, the 19 market structure is still deepening. It seems that the financial sector will rise to the 28 pattern when the financial sector rises.

The most intense stage of financial supervision has passed, and has entered a period of easing up.

The internal rhythm in the process of financial deleveraging provides a window for market restoration.

With the short-term easing of financial regulation and related favorable policies, short-term market risk preference is conducive to a rebound in the market, but on the whole, the current stage of time is more of an observation period attribute, one is the observation of the impact of financial regulation on credit risk, and the two is the observation of the market's response to the regulation of the stock market itself.

The impact of credit risk remains to be seen.

From the logic of regulatory behavior, the follow-up financial supervision will pay more attention to the coordination between the rhythm and the departments, and the most intense stage from the emotional impact of the market is over.

From the actual impact of regulatory measures on the fundamentals, the current interest rate spreads on short-term overnight lending and cross quarter interest rates in the capital market have significantly expanded. The SHIBOR1 interest rate and the benchmark interest rate of the 1 year loan are upside down, and the subsequent liquidity and credit risk still need further observation.

The dual understanding of stock market regulation remains to be seen.

Because the market has different understanding of market regulation as "operation rule" oriented, or "market performance" oriented, and widely believes that regulatory policies contain the will to guide the market to rise and fall, the market's attitude towards regulatory policy is particularly complicated under the overall weakness of the market.

The short term "reducing the new rules" is based on the logic of trading to ease the pressure on shareholders to reduce centralization. In the medium term, there may be some worries about reducing market liquidity, as well as the considerations of policy uncertainty.

The market is currently in the bottom and observation window period.

With the restoration of risk appetite, the market may rebound. However, there are still uncertainties in financial regulation, investors' understanding of regulatory understanding, interim liquidity nodes and the Federal Reserve's interest rate hike.

The above risk factors have been predicted by the market to a certain extent, but only a small deviation from the actual impact or expectation. The market downside is relatively limited. With the boots of these factors settled, the market upward risk is greater than the market downside risk.

One week before the holiday, the market performance increased further. The Shanghai Composite Index rose 0.63% on 22-26 May, while Shenzhen's index fell 1.12%, and the gem index fell 2.3%.

Banks (5.37%), non silver (5.1%), coal (2.01%), household electrical appliances (0.42%), food and beverage (0.4%) were in the front, and defense industry (-4.01%), light industry manufacturing (-3.43%), machinery (-3.38%), and basic chemical industry (-3.35%) were on the back.

On the whole, on the one hand, the main line of market expectations is still unclear. Two, the 19 market structure is still deepening. It seems that the financial sector will rise to the 28 pattern when the financial sector rises.

2. we believe that, with the most intense stage of financial regulation, the internal rhythm of financial deleveraging provides a window for market restoration.

With the short-term easing of financial regulation and related favorable policies, short-term market risk preference is conducive to a rebound in the market, but on the whole, the current stage of time is more of an observation period attribute, one is the observation of the impact of financial regulation on credit risk, and the two is the market's observation of the stock market regulation itself.

3. the impact of financial regulation on credit risk remains to be seen.

We pointed out that the impact of financial regulation will start from four stages, namely, risk preference, liquidity risk, credit risk and risk-free interest rate. At present, it is still in the second, third stage.

There are two dimensions for the impact of financial regulation, one is the rhythm and intensity of regulatory actions, and the other is the manifestation of the impact of the relevant measures on the fundamentals. Two

From the first dimension, from the recent central bank open market to maintain steady liquidity measures, more emphasis on "one line, three sessions" to strengthen regulatory policy, communication and coordination release signals, the follow-up financial regulation will pay more attention to the pace and coordination between departments, the most intense stage from the market emotional impact has passed.

However, from the second dimensions, the interest rate spreads between short-term overnight lending and cross quarter funds in the capital market have significantly expanded. The overnight value of SHIBOR decreased significantly from 2.85% in May 4th to 2.6% in May 27th, while the SHIBOR3 period increased significantly from 4.35% to 4.55% in the same period.

There is still greater uncertainty.

In addition, the SHIBOR1 interest rate has reached 4.354% in May 27th, which is already higher than the 1 year benchmark lending rate. The effect of interest rate upside down on bank balance sheet and credit is still to be observed.

In fact, in April, the growth rate of industrial enterprises' revenue declined from 14.5% to 12.3%, and the profits of industrial enterprises dropped from 23.8% to 14%. Whether the funds were "smooth" after being "cleared up" remained to be confirmed.

4. the dual understanding of stock market regulation remains to be seen.

Because the market has different understanding of whether market regulation is mainly guided by "operation rules" or "market performance oriented", there is a widespread understanding that regulatory policies contain the will to guide the rise and fall of the market. Under the overall weakness of the market, the market's attitude towards regulatory policy is particularly complicated.

During the small holiday period, the Commission's "reduction of new rules" by investors in May 27th can clearly see this difference.

Objectively speaking, the new regulation will have a greater impact on the first and second markets. In the long run, it will help to guide listed companies to focus their attention on improving the business efficiency of enterprises.

But it is also necessary to see that the realization of long-term goals is necessarily a long-term process. In the short and medium term, paction logic is the main reason. For the two tier market, short-term trading is based on paction logic to alleviate the pressure of shareholders' centralized reduction, while in the medium term there may be worries about reducing liquidity in the market, as well as considerations of policy uncertainty.

In view of this, the market's understanding of stock market regulation policy and its realistic response remains to be seen.

5. we believe that the market is at the bottom and observation window.

With the restoration of risk appetite, the market may rebound, but there are still uncertainties about the actual impact of financial regulation, investors on regulatory understanding, interim liquidity nodes and the Federal Reserve raising interest rate. Because the financial market has not actually achieved "penetration" (which is one of the key objectives of the current financial regulation), the real impact of the relevant factors does not need to be forced to make a presupposition judgment.

The above risk factors have been predicted by the market to a certain extent, but only a small deviation from the actual impact or expectation. The market downside is relatively limited. With the boots of these factors settled, the market upward risk is greater than the market downside risk.

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