The impact of the new regulations on public offering commissions has spread to brokerage research institutions.

In the first half of 2024, brokerage commission income from split accounts was 6.774 billion yuan, a decrease of 29.98% compared to the same period last year, with commission income of top brokerage firms generally declining by more than 20%.

As a result, the deputy director of the research institute of Zheshang Securities, the head of the large cycle group, and the chief of new metal materials, Shi Yi, have chosen to resign and sell cosmetics in Africa.

Only those who can stay in the research institute at present are probably the outstanding among the crowd.

Recently, there has been a bold statement from a chief analyst,

"The recent low point of the A-share index may have passed."

It is worth taking a good look at how this conclusion was made in this situation.

1

Has the lowest point of the A-share market passed?

On September 4th at 15:00, the Shanghai Composite Index officially fell below 2800 points and closed at 2784.28 points.

On September 4th at 16:19, Chen Li, Chief Economist of Dongwu Securities, officially published an article titled "The Recent Lowest Point of the A-share Index may have Passed".

One hour after the A-share index officially fell below 2800 points, Chen Li still expressed optimism in an article, believing that the recent lowest point of the A-share index has passed, indicating his strong confidence in this viewpoint.

This judgment is based on two axioms: Axiom 1: Volume of land determines its value, and Axiom 2: Stock price leads profits.

In terms of the volume of land and market valuation in Axiom 1, Dongwu's chief economist starts with two data indicators, A-share turnover rate and credit spread of bonds.

The previous turnover rate of A-shares has dropped to the level of the fourth quarter of 2018, which is the low point level of a typical bear market. The recent total A-share trading volume has reached a low point of about 480 billion yuan, with a turnover rate of about 1.5%. The current turnover rate is close to the low point of 2018, so it can be considered as experiencing a low volume.

Regarding the credit spread of bonds, the article mentions that the low point of bond credit spread is related to the low point of stock market turnover rate. Generally speaking, the stock market turnover rate will enter a low point before or after the bond credit spread hits bottom. If the credit spread starts to widen, the stock market trading volume will also increase, such as in May 2020 and October 2022.

In terms of Axiom 2, the low point of stock prices often precedes the low point of corporate earnings.

The year-on-year growth rate of listed companies' revenue in the second quarter of 2024 (total A-shares/total A-non-financial petroleum and petrochemicals) has reached the fourth lowest point in the past 20 years. Continuous decline in revenue (i.e. continuous negative growth rate of revenue on a year-on-year basis) has not exceeded 3 quarters in A-share history.

Therefore, the article boldly speculates:

The year-on-year growth rate of listed companies' revenue in the third quarter of 2024 may be the lowest point of this cycle, and it may still be negative. But starting from the fourth quarter of 2024, the year-on-year growth rate of revenue will begin to rise. In other words, we are now experiencing the lowest point of corporate earnings, and the lowest point of stock prices has already passed.

2

Does '地量' mean land price?

Since August, almost all analysts from research institutions have been discussing the issue of 'A股地量' and the bottom price.

Minsheng Securities believes that behind the 'A股地量' is a result of the trend of participant changes and the combined effect of phase-trading funds moving out, from northbound funds and active equity funds to ETFs and insurance funds.

Tianfeng Securities' research report 'Thoughts on the Market with '地量'' published on August 17 presents a different view on 'A股目前地量水平相当于2018年Q4'.

The report mentions that after removing the impact of new stocks, the current level is still significantly higher than the lowest value in Q4 of 2018, approximately equivalent to the central values of 2018 H1 and 2019. In terms of industry structure, most industries have a '地量' level higher than the low point of 2018. However, sectors with dividend characteristics such as banks, publishing, electrical utilities, coal mining, and industrial metals, as well as consumer sectors like food and beverage, automobiles, have similar '地量' levels to the lowest point in 2018, and the absolute levels are also relatively low.

The question that most people are concerned about is whether '地量' represents land price, or if '地量' can bring about a rebound.

Tianfeng Securities stated that in the '地量' market in the second half of 2018, the current land price would appear after about a month, and the '地量' market would last for about a quarter.

CASC Securities believes that "low volume" is helpful for determining timing, but changes in market sentiment mainly depend on changes in fundamentals.

Minsheng Securities' report also mentions that historical market bottoms are often accompanied by "low volume", but there need to be more characteristics of bottoming out: for example, a higher turnover ratio can bring larger price changes, the number of industries with upward profit adjustments increases, and institutional investor sentiment begins to recover.

Therefore, it must be based on the obvious improvement of the economic fundamentals, otherwise it is difficult to say that A-shares will have a sustained market.

Recently, the discussion about lowering interest rates on existing home loans has become more and more heated. As of the end of the second quarter, the six major state-owned banks had a total personal housing loan balance of 25.49 trillion yuan, a net decrease of 325.471 billion yuan from the beginning of the year, and there is an increasing call for lowering interest rates on existing home loans.

On the one hand, there is more news from foreign media. It is reported that financial regulatory agencies have proposed a total reduction of about 80 basis points in interest rates on existing home loans nationwide, which will be implemented in two steps. The first round of reductions may take place in the next few weeks, and the second round will take effect in early next year.

On the other hand, there is the latest statement from the central bank regarding the reduction of interest rates on existing home loans.

Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, stated in a press conference today that in terms of interest rates, the central bank continues to promote the steady and moderate reduction of overall financing costs in society. However, it is also necessary to see that there are certain constraints on further downward movement of deposit and loan interest rates due to factors such as the flow of bank deposits into asset management products and narrowing net interest margins of banks.

Be patient.

3

Four HS300ETFs have surged in volume by nearly 2 times.

After being quiet for a few days, the mysterious force finally took action.

Four HS300ETFs have surged in volume in the afternoon. The trading volume of Huatai Bairui Fund HS300ETF, Yifangda HS300ETF, Jiashi Fund HS300ETF, and Huaxia HS300ETF today was 5.326 billion yuan, 4.236 billion yuan, 1.172 billion yuan, and 10.85 billion yuan respectively, all exceeding the trading volume of yesterday. The total trading volume was 11.82 billion yuan, 1.89 times larger than yesterday's 4.092 billion yuan.

(The content of this article is a list of objective data and information and does not constitute any investment advice)

In addition to the four HS300ETFs, did the ETFs that China Investment Corporation increased its holdings in the first half of the year show increased volume today?

From the statistical results, it is obvious that the two ETFs tracking the SSE Science and Technology Innovation Board 50 Index had increased volume today. The trading volume of GYRuiXin Fund Star 50 ETF and Yifangda Fund Star 50 ETF was 0.105 billion yuan and 3.86 billion yuan respectively, with an increase of 58.59% and 42.23% compared to yesterday.

From the intraday chart of the SSE Science and Technology Innovation Board 50 ETF today, the trading volume was relatively evenly distributed throughout the day, and there was no sudden surge in volume at any particular moment.

However, the SSE Science and Technology Innovation Board 50 ETF showed a very obvious surge in volume after 14:00.

In a previous article on the evolution of ETFs, it was mentioned that whether A-shares can achieve style switching depends on the dynamic capital flow of ETFs, which is one of the increments. It is important to continue observing whether these two ETFs tracking the SSE Science and Technology Innovation Board 50 can maintain the state of increased trading volume.