Author:
Minsheng Securities Research Institute's macro-receipt supervisor and chief macro analyst: Zhang Yu
License number: S0100517090002
Macro Retention Research Assistant: Qi Wen
License number: S0100117060048
Macro Retention Research Assistant: Wang Wei
License number: S0100117080081
Comparison of the valuation of the three places in Shanghai and Hong Kong
Event: On April 11, 2018, Mr. Yi said in the Boao Forum that he would strive to open "Huluntong" within 2018. On the same day, the China Securities Regulatory Commission (CSRC) announced on the official website that it will speed up the opening of the “Shanghai Luntong†and realize the news of the exchange between the Shanghai Stock Exchange and the London Stock Exchange.
I, "Huluntong" development process: or landing within the year
The new model of “Huluntong†was first proposed on the seventh Sino-British economic and financial dialogue on September 21, 2015. Subsequently, from 2015 to 2017, the CSRC and the Shanghai Stock Exchange actively promoted the feasibility study of “Huluntongâ€. In this year's Boao sub-species forum, the e-governor gave an important future time node for the development of Huluntong. The exchange between the Shanghai Stock Exchange and the London Exchange was achieved during the year, which means that Huluntong will accelerate this year.
II. The meaning of "Huluntong"
The significance of interoperability before the opening of the Shanghai Stock Exchange and the Stock Exchange is:
1) “Huluntong†provides more diversified investment channels and options for domestic investors. According to the “2017 China Private Wealth Report†issued by China Merchants Bank and Bain, the proportion of overseas investment in investment assets (including financial assets and investment properties) of RMB 165 trillion in China as of 2016 is only 4.7%. . China's overseas asset allocation ratio is significantly lower than that of developed countries.
2) Further advance the pace of capital market reform, improve market mechanisms, and promote the internationalization of the Chinese market.
3) Huluntong helps to improve the structure of China's capital market. Non-professional individual investors in China's stock market are the main players in the market, and are also the potential reasons for the frequent volatility in the A-share market. As a relatively mature financial market, London is dominated by professional institutional investors. The opening of Huluntong means that A-shares will introduce more institutional investors and bring their investment ideas based on the real value of each company to the Chinese market, which will help stabilize the market's large fluctuations.
III. The "Huluntong" model will be different from "Shanghai-Hong Kong Stock Connect"
Following the smooth opening of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. Some people will ask if Huluntong will copy the Shanghai-Hong Kong Stock Connect model? Can we regard "Shanghai Luntong" as a Shanghai-Hong Kong Stock Connect in Europe? Since Huluntong and Shanghai-Hong Kong Stock Connect have great differences in terms of trading rules, fund flow supervision, trading mode and open scope, we believe that Huluntong's model will be completely different from the previous “Shanghai-Hong Kong Stock Connectâ€.
From the perspective of trading hours. For investors, the operational level of Huluntong is more difficult than that of Shanghai-Hong Kong Stock Connect. First of all, there is a big difference in the time zone. There is no time difference between the Hong Kong stock market and the domestic market, and the trading time is almost synchronized. For A-share investors, it is more convenient to trade in Shanghai-Hong Kong Stock Connect. However, the time difference between London and China is 7 hours, so there is a big difference in trading time.
From the perspective of the flow of funds, Shanghai-Hong Kong Stock Connect is a problem of internal financial flows in China, and Huluntong will involve cross-border capital flows. And the two countries have differences in terms of law, taxation, and capital delivery.
From the perspective of trading patterns, due to the large differences between the Chinese and British stock markets (such as time difference, such as the limit of the daily limit, the trading rules of T+0 and T+1, etc.), it is very likely that Shanghai Luntong will follow the world. Depository securities trading model, that is, Chinese companies are issued in the London market in the form of GDR, and London companies are issued in CDR form. In this way, when trading the London corporate stock CDR and the international investor trading the Chinese corporate stock GDR on the London Stock Exchange, it is trading according to the local trading system and during the normal trading hours of the local. The GDR model is easier to implement than other models, and this model is different from Shanghai-Hong Kong Stock Connect.
From the perspective of openness, according to the official website of the Stock Exchange, no more than 10 GDRs will be issued in the initial stage. Because the regulatory mechanism, trading system, and market environment are quite different, even if Shanghai Luntong is opened, it is only a test stage, and there is no greater open scope like Shanghai-Hong Kong Stock Connect.
IV, Shanghai, Hong Kong, and Lunland stock market and industry valuation comparison
After excluding the impact of the undervalued and undervalued small-cap companies on the valuation (selecting the median valuation of the top 80% of the stocks), we found the overall valuation of the A-shares (median) And the valuation level (median) of each industry is higher than that of the UK and Hong Kong. For domestic investors, UK stocks have some attractiveness in valuation.
According to the April 2018 data showing the overall market price-earnings ratio, the A-shares are generally higher than the London and H-share markets. The H-share and London markets are basically the same.
According to the comparison of P/E ratios of various industries in the three places, the overall valuation of A-shares in various industries is relatively high, and the valuations of H-shares and London Stock Exchanges are relatively uniform.
Second, the economic situation last week
I. Entity: Real estate sales weakened last week
1. Demand side: last week, the transaction area of ​​commercial housing weakened, mainly due to the drag of third-tier cities
Last week, the transaction area of ​​commercial housing was negative, and the growth rate of real estate sales slowed down. Among them, the growth rate of third-tier cities was the most obvious. Last week, the transaction area of ​​commercial housing in 30 large and medium-sized cities was -0.91%, of which the transaction area of ​​commercial housing in the first, second and third tier cities was -6.53%, 28.75% and -51.25%. As of the 20th, the transaction area of ​​commercial housing in large and medium-sized cities on April 20 was -48.14%, which was lower than that of last month's -39.71%. The first, second and third tier cities were -50.84%, -36.30% and -71.59%.
2. Midstream: Last week, coal consumption for power generation decreased slightly, steel and cement prices strengthened.
Last week, coal consumption was reduced, and coal consumption in April was steadily increasing by -0.99%. Last week, the power consumption of the 6 largest power generation groups was -1.94%. As of the 20th, the power consumption of the 6 largest power generation groups in April was -0.99%, an increase from the previous month's growth rate of -2.45%. The year-on-year growth rates of coal consumption for power generation on 13-20 were 1.93%, 11.65%, 10.02%, 3.18%, 0.94%, 5.53%, 2.29% and -0.99%, respectively.
Last week, the operating rate of blast furnaces was flat, and the volume of steel fell. The operating rate of the blast furnace last week was 67.27%. Last week, rebar futures price was 1.55% to 3,475 yuan/ton, and last month's rebar futures price was 8.04%, compared with 16.40% in February. Last week, rebar Shanghai stocks fell by 38,900 tons to 363,400 tons.
Last week, the cement price index rose by 2.42 to 137.5. Since 2018, the price of PO42.5 cement in all regions has declined, and it has gradually recovered since late March.
3. Upstream: last week's bulk index, crude oil, coal, colored rebound
Last week, the CRB index and the South China Index fell slightly, and the South China Index increased its rate since February. Last week, the CRB Composite Index and the Industrial Raw Materials Index were 1.34% and 0.63%, respectively, and the South China Composite Index and Industrial Index were 0.88% and 1.46%. As of the 20th, April CRB composite index and industrial raw materials index were 2.23% and 2.67% (previous value 2.20% and 2.94%), and the South China Composite Index and industrial index were 5.64% and 8.96% (previous values ​​-0.01% and 0.04%). ).
Last week, crude oil prices rose year-on-year. Last week, NYMEX light crude oil futures price was 1.13% to US$68.06/barrel. As of the 20th, the price of IPE oil and NMEX light crude oil in April was 36.54% and 34.16%, up from 26.27% and 25.90% in the previous month, mainly affected by US stocks. In terms of inventory, from April 6 to April 13, the US commercial crude oil inventories fell by 1.71 million barrels, and API crude oil inventories fell by 1.047 million barrels. From April 10th to April 17th, WTI's non-commercial long position was 13640 contracts per week, and short positions were -7,411 contracts per week.
Coal prices rose last year. Last week, the price of thermal coal was 6.21% to 588.2 yuan/ton, and the price of coke was 6.75% to 1859.5 yuan/ton. As of the 20th, the price of thermal coal and coke in April was 9.99% and 19.35% year-on-year, and the increase in March was -0.65% and 8.95%. Last week, Qinhuangdao Port coal stocks fell by 625,000 tons to 5.905 million tons.
Last week, LME copper and LME aluminum prices increased, and LME copper and LME aluminum prices rose in April. Last week, LME copper and LME aluminum rings were 1.60% and 5.94%, and inventory was -1.02% and 3.74%. As of the 20th, the LME copper and LME aluminum prices increased by 23.66% and 27.42% in April, and 16.74% and 9.20% in March.
II. Price: April pig price is the main drag of CPI
Last week, pig prices, vegetable prices, and egg prices were -1.62%, -1.27%, and 7.64%. As of the 20th, April pig prices, vegetable prices, egg prices -24.50%, 5.53% and 33.57%, March - 18.91%, 3.20% and 38.64%. The pig price in April may still be a drag.
March CPI was 2.10% year-on-year, and pig price was the biggest drag. In March, CPI food items and non-food items were both 2.10% year-on-year. Food items were mainly dragged down by pig prices. Non-food items were mainly driven by housing, health care, education, culture and entertainment.
It is expected that after the second quarter, the CPI growth rate will rebound slightly. For food items, the pig price was relatively narrower than the low base last year, and other food items also had the pressure of post-holiday rebound. For non-food items, the rise in crude oil prices in March may drive the CPI recovery in the short-term.
III. Currency: Last week, the net investment was 470 billion yuan.
Last week, the net investment of the currency was 470 billion yuan, of which the open market operation was 388.9 billion yuan, and 857.5 billion yuan was put into operation. The open market operation through the 7-day reverse repurchase of 220 billion, 14 days reverse repurchase of 70 billion, MLF released 367.5 billion; 7 days reverse repurchase due 20 billion, MLF returned 377.5 billion.
The money market interest rate is short-term upwards and the long-end is down. DR007 and R007 go up 11.69BP and 15.23BP respectively. Last week's 1-year and 10-year treasury bonds fell 19.52BP and 18.47BP to 3.0061% and 3.5215% respectively, and the term spread rose 1.05BP. The 1-year and 10-year credit spreads fell 5.54BP and 5.14BP respectively. (This article is transferred from WeChat public number: one in Yu)
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