There are only 3 days left until the Spring Festival holiday. After yesterday's thrilling A-share V, today the market collectively ushered in a major counterattack, and market sentiment picked up.

As of press release, the Shanghai Stock Exchange Index had risen more than 3%, the GEM Index and Shenzhen Stock Exchange had soared by more than 6%, the Beijing Stock Exchange 50 had risen more than 8%, and the Science and Innovation 50 had risen more than 5%. On the market, big finance, photovoltaic equipment, consumer electronics, biomedicine, etc. are on the rise collectively.

Up to now, the turnover of the Shanghai and Shenzhen markets has exceeded 500 billion yuan, of which the Shanghai market's turnover is 233.1 billion yuan and the Shenzhen market's turnover is 267 billion yuan.

The Hong Kong stock market also skyrocketed across the board. The Hang Ke Index soared more than 6%, the Hang Seng Index rose more than 3%, and the National Index rose more than 4%. Large technology stocks have collectively attacked. Kuaishou surged more than 9%, Ali surged more than 7%, and JD, Bilibili, and Meituan rose more than 6%. On the market, there was a big rebound in automobiles, semiconductors, pharmaceuticals, application software, etc.

Currently, the net net purchase of Northbound Capital exceeds HK$12.5 billion; the net sales of Southbound Capital have exceeded HK$4.9 billion.

As of press release, the offshore renminbi rose more than 200 points against the US dollar during the day, breaking 7.20 in the intraday period; the onshore renminbi rose nearly 100 points against the US dollar during the day, and is now reported at 7.1900.

The huge benefits keep coming!

Today, the Central Huijin Company, known as the “National Team”, announced an increase in holdings.

Central Huijin said that it fully recognizes the current allocation value of the A-share market. It has recently expanded the scope of increasing holdings of traded open index funds (ETFs), and will continue to increase its holdings and expand the scale of holdings to resolutely maintain the smooth operation of the capital market.

Subsequently, the China Securities Regulatory Commission followed up on the response, stressing that it would create more convenient conditions and smoother channels for its market entry operations.

A spokesperson for the Securities Regulatory Commission said that the CSRC will continue to coordinate and guide various types of institutional investors such as public funds, private equity funds, securities companies, social security funds, insurance institutions, annuity funds, etc. to enter the market more vigorously, encourage and support listed companies to increase their repurchases and holdings, introduce more incremental capital into the A-share market, and make every effort to maintain the stable operation of the market.

It is worth noting that the Securities Regulatory Commission made a big statement today. In addition, it also answered questions from reporters about the “Two Finance” securities lending business and proposed measures to further strengthen supervision of the securities lending business in three areas:

The first is to suspend the scale of new transfer securities, use the current balance of the securities as the upper limit, suspend the size of new securities companies' transfer notes in accordance with the law, and gradually end the stock;
Second, securities companies are required to strengthen the management of customer transactions, and it is strictly prohibited to provide securities loans to investors who use securities lending to carry out intraday revolving transactions (disguised T+0 transactions);
Third, we will continue to strengthen supervision and enforcement. We will crack down on illegal acts such as improper arbitrage using securities lending transactions in accordance with the law to ensure the smooth operation of the securities lending business.

In addition to this, the Securities Regulatory Commission also held a symposium to support mergers, acquisitions and restructuring of listed companies to study and implement a “quick review” of the restructuring of leading companies with large market capitalization to support efficient mergers and acquisitions of high-quality assets by leading companies in the industry.

Yesterday, the Securities Regulatory Commission issued four articles in a row, releasing policy signals to maintain market stability. It covers aspects such as stock pledge risks, “dual finance” financing operations, malicious shorting, and listed companies.

Regarding malicious shorting, the Securities Regulatory Commission stated that it will maintain a “zero tolerance” high-pressure stance and resolutely crack down on it so that those who dare to manipulate the law and commit malicious shorting can “go bankrupt and stand firm.”

A sign of bottoming out?

With regard to the entry of the national team, market analysis A shares “market bottom” is being established.

An analyst at Fangzheng Securities said that the Central Huijin Company's shareholding increase announcements can generally be a “firing gun” established by the “bottom of the market” for A-shares. Judging from historical trends, the “bottom of the market” for A-shares can be established as soon as 4 days after the relevant holdings increase announcement is issued.

It is worth noting that the “private equity witch” Li Bei “admitted the mistake” and reduced her position, and then prepared for a protracted battle.

She recently revealed to holders that after the start of the year in 2024, Banxia Investment realized a mistake in her judgment and drastically reduced its position and stopped losing equity assets in mid-January.

“The past few months have indeed made the mistake of the quick win theory. They have not been careful enough, have not been patient enough, and have not understood the response mechanism for short- and medium-term policies deeply enough. Prepare for a protracted battle before you see a clear signal on the right. The first thing is to defend well and preserve strength.”

In addition, Li Bei also publicly stated today that the risk of small-cap stocks has received attention.

In the article, she pointed out that yesterday the China Securities 500 ETF and the China Securities 1000 ETF received net capital purchases of over 10 billion dollars and nearly 10 billion dollars respectively; this morning Huijin also made a public statement, expanding the scope and intensity of increasing its holdings in ETFs. This shows that the risk of small-cap stocks has been noticed, and effective measures have begun to be taken.

Yao Pei, chief strategy analyst at Huachuang Securities, believes that the current strategic placement value of A-shares has been shown.

Looking at macroeconomic fundamentals, the domestic economy is expected to gradually recover steadily. In January, the official manufacturing PMI was 49.2 and the Caixin manufacturing PMI was 50.8. The overall manufacturing boom level has rebounded from the previous value.

In terms of policy, recently the central bank, the Securities Regulatory Commission and other departments have continued to speak out and introduce relevant measures to implement the deployment requirements of the National Standing Committee and focus on stabilizing the market and stabilizing confidence.

Judging from the valuation, A-shares are close to the historical bottom range and are extremely cost-effective. As of February 5, the Shanghai Composite Index PE (TTM) was 11.7 times higher, at the historical quartile level of 12% in the past 10 years.

Editor/Somer