A Shares In 2019, The Market Of Maverick City Is Ready To Reform And Increase Expectations.

Year end summary of A shares

In the process of continuous reform and opening up, there were many positive changes in the capital market in 2019. In 2019, the bull market in the A share market was interpreted. The annual growth rate of the main index is obvious. Even many indexes are in the forefront of the world, and the market's activity and risk preference have been greatly improved. In 2019, the science and technology board was opened and registered, and its overall operation was stable. It accumulated experience for the full implementation of the registration system in the capital market. In 2019, foreign capital accelerated into A shares, and net capital flows to the North reached a record high. Entering 2020, the capital market will continue to deepen reform, and a series of important measures will gradually fall into place in 2020. The market is full of expectation for the A share market in 2020.

A shares declared the end of the market in 2019 with the red line across the board.

In December 31, 2019, stock index rose to 3050.12 points, up 0.33%; Shenzhen Securities Index, SME board index and gem index rose to 10430.77 points, 6632.68 points and 1798.12 points respectively, up 0.63%, 0.95% and 0.44% respectively.

The overall rise of the last trading day has also made the A stock market's year-round rally perfect. Data show that the Shanghai Composite Index, Shenzhen stock index, small and medium-sized board index, and gem index rose by 22.30%, 44.08%, 41.06% and 43.79% respectively in 2019. Among them, the Shanghai Composite Index has been the biggest annual gain since 2014. Although the Shenzhen stock index is not the best among all the global stock indexes, it has the largest increase in the world's major stock index, but the US NASDAQ index has not risen by more than 40%, and it is also less than the A share index.

In the industry view, from the registration system to improve the quality of listed companies and other capital market reforms, as well as institutional arrangements for the active introduction of long-term funds for the market, a variety of initiatives are expected to promote the 2020 A share market activity and institutional investors to further improve the allocation of strength.

A shares declared the end of the market in 2019 with the red line across the board. Song Wenhui diagram

Index, activity "double liter"

On the last trading day in 2019, the Shanghai Composite Index held 3000 points successfully.

Transaction data show that in 2019, although the Shanghai stock index rose more than 22% in the whole year, the six round around the 3000 points in the whole year, finally successfully stabilized this integer pass at the end of the year.

Vertically, the stock index rose 22.30% in 2019, the largest annual gain in nearly 5 years, while the same year's growth of 41.06% and 43.79% of the small and medium sized boards and gem also hit the biggest increase in the past 4 years, while the Shenzhen Composite Index hit the biggest annual gain in nearly 10 years with the annual increase of 44.08%.

Horizontal comparison, A share market performance is also better than some mature markets. For example, the FTSE 100 index and the Nikkei 225 index all lagged behind the Shanghai Composite Index in 2019, while the NASDAQ index also lagged behind the gem index and the small and medium board index.

It is worth mentioning that, although the overall A share index in 2019 is better than the mature markets in the US and Europe, the retreat of the A share market is even higher in 2018.

For example, in 2018, the Shanghai Composite Index fell 24.59%, while the Dow Jones Industrial Average fell 5.63%, while the gem index fell 28.65%, while NASDAQ only fell 3.88%.

"A shares performed better than other markets in 2019, and they have strong correlation with market elasticity, because A shares tend to show a larger decline in the downlink period, which is due to a smaller proportion of institutional investors, resulting in stronger volatility of A shares." "If the global equity assets are better in 2020, the A share market will be a big probability event ahead of other markets," said a US stock analyst of a listed brokerage in Beijing.

While the index rose, A shares' activity was further revived.

From the volume of transactions, the Shanghai Stock Exchange in 2019 reached 54 trillion and 200 billion yuan, the largest transaction scale since 2015.

However, from the comprehensive perspective of Shanghai and Shenzhen two cities, there is still a distance between 2019 and 2016. Transaction data show that the total turnover of A in 2019 reached 126 trillion and 30 billion yuan, a difference of 480 billion yuan compared with 126 trillion and 510 billion yuan in 2016.

But in the industry view, from the actual volume reflected in the turnover volume, the activity level in 2019 has become the most in 4 years.

"In terms of turnover, 2019 is close to the level of 2016, but considering the low market position, the turnover reflects a new high since 2015." A strategist at a large brokerage firm in Beijing pointed out that "because the current share price is lower than that in 2015 and 2016, the scale of the transaction volume will lead to a larger volume of turnover, so 2019 has been the highest year for A shares in the past 4 years."

Consensus of optimistic expectations

In addition to the rise in index and turnover, the change in credit trading account and the two melt level also showed a rise in market risk preference.

Data show that the Shanghai and Shenzhen credit accounts rose to 5 million at the end of September 2019, up to the end of November 2019, reaching 5 million 77 thousand and 600. The last time the number of credit accounts exceeded 5 million, or in November of 2014, but with the A shares shaking in the following year, regulators' verification led to a sharp decrease in credit accounts.

"From the indicators of credit accounts, more and more investors are satisfied with the conditions of opening credit accounts and choose credit transactions." A non banking financial analyst at a brokerage firm in Beijing said.

Meanwhile, the two "water level" has also returned to the scale of trillions since April 16, 2018. As of December 30, 2019, the scale of the two financial balances amounted to 1 trillion and 19 billion 450 million yuan, and since December 18, 2019, the balance of A shares has reached two trillions in nine consecutive trading days.

According to the twenty-first Century economic report reporter statistics, there have been three cycles of two trillion stations in the history of A shares. The first and longest took place from December 2014 to August 2015, the second occurred in October 2015 to December 2015, the third occurred in November 2017 to March 2018, and this time was fourth times.

"The scale of the two scale expansion reflects the confidence and mood of the market to a large extent. On the basis of the expansion of the two financial targets, the two credit transactions have been further developed in 2019." The above non bank analysts said, "if the market optimism can continue, then the two fusion will likely usher in a long period of high water level."

In the eyes of many people in the industry, with the A share registration system and other reform measures and the influx of offshore funds and long-term funds, there is still more obvious allocation opportunities in the A share market.

"There is still a low profile in the equity market in China. Even though some small cap stocks appear to be overvalued, the valuation of some blue chips, large cap stocks and technology stocks is indeed larger than that of the mature international market." A fund manager of a foreign private equity firm in Shanghai said, "from the institutional level, the new regulation of information management and foreign investment will further improve the performance of the equity market."

"In 2020, A shares still have very large valuation repair opportunities. On the one hand, under the circumstances of" frozen housing ", the market is still overfunded, and it is necessary to find the allocation targets, and under the expected growth rate, the overall monetary policy has some loose space. The former strategy analyst said frankly, "on the other hand, although the fundamental pressure is relatively large, the profit growth rate of the economic and corporate sectors will still be better than other markets even if there is a further downward trend, so it will have a strong attraction for capital."