AIFMC Macro & Market Weekly Report

Transcription

1 AIFMC Macro & Market Weekly Report March 30th, 2015

2 Macro Review and Outlook From January to February, the above-scale industrial corporations achieved a total profit of billion yuan, a 4.2% year-over-year drop but a smaller drop by 3.8%. The industrial added value grew by 6.8% year-over-year from January to February, a 1.5% drop from the annual level in 2014, as the economic downturn drags industrial profitability. The initial value of HSBC PMI dropped by 1.5% to 49.2 in March from the end value in February, back below the 50 threshold and making a new low since May In the five main measures, the initial value for the purchase inventory index dropped by 3.4% to 48 in March; the initial value for the purchase number index dropped by 2% to 49.1 in March; the large slips in purchase inventory and number have significantly lowered the PMI. In addition, output, new orders and supply timing have slowed down, also dragging down the PMI. State Council: accelerate the implementation of Made by China 2025 project in building the next stage of China s manufacturing. According to Wind Hong Kong, Premier Li Keqiang hosted the State Council regular meeting on March 25 th to set the focus of the State Council s legislative works and better regulate the developments in reforms; accelerate the implementation of the Made by China 2025 project to upgrade China s manufacturing; receive important updates regarding the restructuring of China Northern Rail and China Southern Rail and emphasize the optimal allocation of resources for SOE reforms. Rumors from press in Hong Kong report that the Shenzhen Hong Kong Stock Connect will be announced in April and launched in October. According to Oriental Daily on March 23 rd, the improvements on the Shanghai Hong Kong Stock Connect as well as the Shenzhen Stock Connect have made a fast progress. A Chinese mutual fund company quoted the regulatory and said that the Shenzhen Stock Connect will likely be announced in April and launched in October, and at the same time the total quota for both the Shenzhen and Shanghai Stock Connect will be lifted, only having a daily investment quota increased to 20 billion yuan. 2

3 Observation of Liquidity Last week, the PBOC continued negative repo operations. The repo rate dropped by 10 basis points to 3.55% and the net capital investment reached 10 billion. Interbank interest rates slightly dropped. Last week, the one-month SHIBOR stayed at 5.0%, while the 7-day SHIBOR dropped by 40 basis points to 3.9%. In terms of the exchange, the 7-day repo rate dropped by 36 basis points to 3.89%. Treasury yields slightly rose. Last week, all treasury yields slightly rose. The 3-month treasury yield increased by 15 basis points to 3.27%; the one-year treasury yield rose by 8 basis points to 3.18%; and the 10-year treasury yield increased by 7 basis points to 3.57%. Interbank Rates Slightly Dropped Treasury Yields Slightly Rose 3-Month 1-Year 10-Year 3

4 Weekly Review of Bond Market Corporate bond yields rose. Last week, corporate bond yields were up by a small margin; high-rate corporate bond average yield rose by 24 basis points, and low-rate corporate bond yields rose by approximately 19 basis points. The credit spread between high-rate corporate bonds and treasury bonds expanded by 15 basis points compared to last week, while the credit spread between low-rate and high-rate corporate bonds contracted by 5 basis points. Quasi-municipal bond yield stayed steady. Quasi-municipal bond yields experienced a significant drop from October to November, but started to recover in December and dropped since. Recently the bond yields experienced a fluctuation. Last week, the high-rate quasi-municipal bond yields rose by 7 basis points, and the low-rate bond yields rose by 1 basis point. The credit spread between quasi-municipal bonds and treasury bonds contracted by 2 basis points, while the credit spread between low-rate and high-rate corporate bonds contracted by 6 basis points. Corporate Bond Yields Rose Quasi-municipal Bonds Yields Stayed Steady Corporate Bond AAA Corporate Bond B Credit Spreads (Corporate Bond AAA-Treasury Bond) Quasi-municipal Bond AA Quasimunicipal Bond A- Credit Spreads (Quasimunicipal Bond AA- Treasury Bond) 4

5 CS Non-bank Finance CS Banking CS Household Appliances CS Coal CS Transportation CS Electricity &Utilities CS Media CS Real Estate CS Building Materials CS Electronics CS Pharmaceuticals CS Basic Chemistry CS Steel CS Ferrous Metal CS Automobile CS National Defense CS Food & Beverages CS Light Manufacturing CS Textile &Apparel CS Petroleum &Petrochemical CS Telecom CS Agriculture, Forestry & Fishing CS Commerce &Retail CS Electric Equipment CS Computers CS Mechanics CS Construction CS Catering &Tourism CSI 300 SME Index GEM Index Finance (style) Cycle (style) Consumption (style) Growth (style) Stable (style) Weekly Review of A-shares The index continued to rally last week. Last week, the index continued to rise. The Shanghai Composite Index closed at , up by 2.04%. In terms of specific industries, catering & tourism, construction and mechanics had relatively large gains, while non-bank finance, banking and household appliances had the weakest performances. In terms of styles, growth stocks had the better performances, as financial stocks had relatively weak performances. Price Changes in a Week Price Changes in a Week - Industries 5

6 Most Industries at Relatively High Valuation Levels In terms of valuation, banking, petroleum & petrochemical, household appliances and construction are currently at the bottom, while national defense, computers and media are at relatively high levels. In terms of historical records, household appliances, banking and food & beverage are currently at the bottom, while national defense, computers, media and mechanics are at historical highs. Compared to the valuation of the entire A-share market, banking, household appliances and petroleum & petrochemical are currently at discount, while national defense, computers and catering & tourism are in premium. Industry PEs (dynamic) Max. since 2011 Min. since Latest 6

7 Disclaimer This document is issued by AIFMC for the intended recipient only. If you have received this document by accident, please call This document is the property and copyright of AIFMC. Further circulation is prohibited without written consent of AIFMC. This document is purely for the purpose of giving company information and introducing AIFMC s QFII advisory capability. All the information relating to the funds mentioned in this presentation (including but not limited to their investment goals, processes, and historical performances) are purely to illustrate AIFMC s QFII advisory capabilities. The information herein is not used for the marketing of any of these funds in any jurisdiction. Although the information provided by third party was compiled from sources believed to be reliable, no liability for any error or omissions is accepted by AIFMC or their affiliates or any of their directors or employees. The information and opinions contained herein is for general reference only and may change without notice, and should not be relied upon for any investment decision. AIFMC All rights reserved. For more information, please contact: James Shang, Vice President, International Business Department shanjc@xyfunds.com.cn, , Beiming Zhang, QFII Sales Associate, International Business Department zhangbm@xyfunds.com.cn, ,