Source: Brokerage China Author: Wang Rui

Citic Sec: Active funds continue to enter, with greater short-term growth resilience.

The A-share market is currently in a stage of active fund continuous entry-led policy game trading, with policy expectations dominating short-term trends. Policy signals remain positive, and policies that have been implemented are starting to show initial effects, with active funds represented by individual investors continuing to enter the market. Once the policies fully take effect and price signals stabilize, institutional funds may usher in an opportune moment for positive entry, leading to a longer-lasting uptrend. At that time, high-quality growth and domestic demand sectors are expected to continue to outperform. In terms of allocation, growth styles that align with the preference of incremental funds have greater short-term flexibility. After price signals stabilize, high-quality growth and domestic demand varieties may continue to outperform.

China Merchants Securities: Incremental funds still remain positive, continue to focus on event catalysts and economic trends.

Combining the third quarter reports of public funds and the implementation of two new monetary policy tools, determine that incremental funds still remain positive. Looking ahead, it is expected that after market sentiment returns to a reasonable level, sustained policy efforts will stabilize and boost the economy, with the market potentially returning to an upward trajectory. In November, the industry allocation will focus on sectors with improved third quarter performance, ongoing policy support, and areas expected to benefit from the U.S. election, recommending a focus on electronics, computers, household appliances, automobiles, machinery equipment, and other specific sectors.

GTJA Securities: A look back from the 'expectation' to the 'reality'

The policy attitude is clear, the stock index is rising at the bottom, showing an N-shaped medium-term trend. After the previous pulse, as policy differences diminish, the market, which only fades the reality with trading expectations, is nearing its end. It is a decision-making period for domestic policies and overseas elections, causing short-term stock index fluctuations. It is recommended to invest by considering both long-term value and short-term valuation. While the enthusiasm for thematic investments is still present, caution should be taken for cooling down. The 'policy bottom' is forming, so the focus should shift from index heavy weighting to structural considerations, especially in sectors that are expected to bottom out in the future production capacity cycle and normalize future growth.

haitong sec: Policy warm wind continues.

Since the beginning of the year, the policy support for the capital markets has continued to be implemented. With the policy clearly turning towards September 24, market confidence has been significantly boosted. The market is currently undergoing a transition from bear to bull, with policies taking the lead, and underlying fundamentals improving accordingly. Looking back at history, during the period from policy implementation to fundamental restoration, the stock market tends to be volatile. Technology and high-end manufacturing with better fundamentals may become the main focus of the stock market, specifically focusing on technology manufacturing that benefits from the recovery of the industrial cycle, as well as high-end manufacturing that has both supply and demand advantages.

Minsheng Securities: Slow things down

The A-share market continues to rise overall, driven by the acceleration of industry rotation speed. Domestic investors are still trading based on their own expectations, and the clarity of direction may still await the outcome of the US election and domestic policy proposals. In the absence of further fundamental information, both domestic and foreign participants are balancing their portfolios based on potential future scenarios, thereby highlighting the current market's "game attributes". Considering that A-shares may currently be underpricing downside risks, low-volatility assets may be a short-term "safe haven". It is worth noting that the medium to long-term fundamental trends are emerging, and the physical assets related to them are sectors that are clearly being overlooked by the current market, which also brings new opportunities.

Huaan Securities: Smooth sailing, rising to a higher level

There are signs of improvement in the economic fundamentals, with positive expectations for subsequent policies, especially as the market anticipates positively the National People's Congress and the Economic Work Conference, providing continued support to the market. Overall, the only risk comes from the external impact of the Federal Reserve slowing down interest rate cuts, but its impact on the A-share market is limited, so the market in November can be more positive. Considering that the Financial sector has the weakest relative elasticity under high market trading volume, although there are signs of economic improvement, conditions limiting the expansion of cyclical sectors, therefore more industry differentiation opportunities will revolve around growth and consumer sectors.

Industrial Securities: Maintain a bullish mindset, focus on three major themes

Since October, after the market experienced fluctuations following a forced short squeeze, we continue to emphasize maintaining a bullish mindset repeatedly, the core reason being: the market logic has reversed. Market trends are inevitably bumpy during an upward trend, with significant fluctuations and differentiation following rapid rises. In fact, this is a natural market and economic interaction, which helps the market progress further. During the period of upward oscillation, following the reversal logic, focus on the three major themes that can navigate through turbulence: potential merger and reorganization directions, third quarter performance advantages & turnaround directions, and structural opportunities brought by the implementation of capital market tools.

Huachuang Securities: Heroes are made by the times

With the rapid implementation of central-level policies, the focus of subsequent policy tracking has shifted to industry ministries and local governments, with particular attention to the research of central leaders at the local level. This round of market trends bears a striking resemblance to the background of "519." With the start of an inflationary bull market, we maintain a clear optimism at the strategic level, while at the tactical level, the market has entered a second phase of high volatility, offering ample room for active management. In terms of industry allocation, we are focusing on the financial sector benefiting from the convenience of cross-border transactions and the resurgence of trading volume, stable cash flow dividends, and growth sectors that still have room for valuation improvement.

BOCI International: Internal rotation of technology sector accelerates.

In the phase of market dulled trading of "weak-reality", the advantage of technology manufacturing as the main line lies in its strong expected space being unrestricted, so even in the current weak-performing segmented directions, the subsequent opportunities in the background of quick rotation are equally worth noting. With the semiconductor cycle on the rise, the current profit advantage of emerging growth assets is significant, while the domestic credit warming needs to be verified, and the profit advantage of traditional cyclical assets has not yet clearly emerged. The relative advantage transformation of the two still needs to pay attention to the repair trend of high-frequency data and credit environment. Overseas mmf policies and election expectations may become important influencing factors in the short-term A-share market.

Soochow Securities: The rise of the ETF investment paradigm, how does it impact the pricing of A-shares?

In this rapid upsurge phase of the index, ETF funds have entered the market in large numbers. Behind the active trading of passive index funds, on one hand, this round of market evolution has been too rapid. For investors, a bundled purchase in a beta-style is more 'efficient.' On the other hand, it also indicates the quiet rise of passive investment, signaling a gradual change in the investment ecosystem of A-shares. Against the backdrop of the rise of passive investment and the control of marginal pricing power, market trading activity and liquidity may become more concentrated on ETF-related stocks, thus potentially benefiting two types of assets: 'highly passive individual stocks' with high ETF weights, relatively high institutional allocations, and low trading volumes in the investor structure.

Editor/Lambor