Policies warm air to help stabilize expectations, big banks are optimistic about the Chinese market

Following last week's meeting of the State Council Financial Committee to stabilize market confidence, Hong Kong stocks continued to recover lost ground.

As of the noon closing today (March 23), the Hang Seng Index has stabilized at 22,000 points.

It is said that "confidence is comparable to gold". With the release of positive policy signals from the Financial Commission, the pessimism in the market is dissipating, and many big banks have reiterated their optimism about the Chinese market.

Last Wednesday, Vice Premier Liu He chaired a special meeting of the Financial Committee.

(Qualification picture)

The market generally believes that the special meeting of the Financial Committee of the State Council held last week is "policy bottom", and many major banks have observed positive policy signals. Among them, JPMorgan Chase and Goldman Sachs remain "overweight" in the Chinese market, while Morgan Stanley Keep it "standard".

From last Tuesday (March 15) closing at 18,415 points, the Hang Seng Index has rebounded to around 22,000 points.

Morgan Stanley China equity strategist Wang Ying pointed out that if the epidemic prevention policy is adjusted, global geopolitical tensions will ease, the real estate market will stabilize, the implementation of policies between different government departments will be more coordinated, and investors will be reinvigorated to offshore. Confidence in the stock market, the rebound may be more sustained.

From last Tuesday (March 15) closing at 18,415 points, the Hang Seng Index has rebounded to around 22,000 points.

(Photo by Lu Yiming)

Undoubtedly, the statements of the Finance Committee and various ministries and commissions play a key role in directly stabilizing market expectations, but the overall improvement in expectations still requires "listening to words and deeds."

Only by taking practical actions can the market truly feel the warmth.

Zhang Ming, deputy director of the Institute of Finance, Chinese Academy of Social Sciences, suggested that at the macro-policy level, the central bank should cut RRR and interest rates as soon as possible to provide sufficient liquidity to the market and support the real economy; fiscal policy and monetary policy should work together to improve Boost market confidence in economic growth; appropriately loosen macro-prudential regulatory policies that should have been "counter-cyclical"; no more industry regulation in the short term; in addition, fully communicate with international investors entering the Chinese stock market, and try to avoid large short-term funds. outflow situation.

In the medium term, the Chinese government may consider introducing a Tobin tax to target abnormal capital flows such as short-term speculation.

For details, please read the 309th issue of "Hong Kong 01" Electronic Weekly Newsletter (March 21, 2022) "