A-share midday report | The Shanghai Composite Index rose by 1.02%, with over 4400 individual stocks increasing. Insurance and other large financial sectors led the gains.

On January 23, the market opened higher but then fell back, with over 4400 stocks in the entire market rising. By the close, the Shanghai Composite Index was up 1.02%, the Shenzhen Component Index was up 0.44%, and the ChiNext Index was up 0.75%. Six ministries jointly issued the "Implementation Plan for Promoting the Entry of Medium and Long-term Funds into the Market". GF SEC pointed out that the policy aims to improve the stability of the capital market, with sufficient stability policies. In the short term, there is a policy window, and market activity is somewhat volatile. With external uncertainties gradually being addressed internally, incremental funds will be mobilized, and market activity is expected to increase again. In terms of market performance, the insurance and securities sectors were active, with strong activity in copper cables. Rare earths, agricultural planting and other sectors were among the top gainers, with no sectors falling in the two markets. In terms of main funds, funds favored the banking, diversified financial, and insurance industries, while funds flowed out of consumer electronics and communication equipment industries. Institutional Views Looking ahead, Orient pointed out that a turning point has already appeared in the A-share market. With various economic policies gradually being implemented, the possibility of economic stabilization and recovery has increased significantly. More industries and companies will experience a trend reversal. GF SEC: Promote the entry of medium and long-term funds into the market, enhance the intrinsic stability of the capital market, and market activity is expected to increase again. GF SEC stated that on January 22, with the approval of the Central Financial Work Commission, the Central Financial Office, the China Securities Regulatory Commission, the Ministry of Finance, the Ministry of Human Resources and Social Security, the People's Bank of China, and the Financial Regulatory Bureau jointly issued the "Implementation Plan for Promoting the Entry of Medium and Long-term Funds into the Market". Insisting on goals and problem orientation, strengthening top-level design, focusing on the present but considering the long-term, the plan focuses on guiding commercial insurance, social security funds, basic old-age insurance, enterprise (job) annuities, public funds, and others to further increase their participation in the market. Promoting the entry of medium and long-term funds into the market will enhance the intrinsic stability of the capital market. The entry of medium and long-term funds is conducive to optimizing the structure of investors, guiding the establishment of a value investment and long-term investment philosophy, reducing market volatility and speculation, thereby boosting investor confidence and better fulfilling the function of market resource allocation. The policy focuses on improving the stability of the capital market, with sufficient stability policies. In the short term, there is a policy window, and market activity is somewhat volatile. With external uncertainties gradually being addressed internally, incremental funds will be mobilized, and market activity is expected to increase again. CITIC SEC: Subsequent entry of medium and long-term funds into the market may accelerate further. CITIC SEC stated that the "Implementation Plan for Promoting the Entry of Medium and Long-term Funds into the Market" has been officially implemented, with specific deployment arrangements made for various types of medium and long-term funds entering the market, involving commercial insurance funds, pension funds, enterprise annuities, public funds, etc. CITIC SEC believes that the subsequent entry of medium and long-term funds into the market may accelerate further, enhancing the intrinsic stability of the capital market. Cinda: The second wave of increase may be a slow start. Cinda believes that before the Spring Festival may be the second buying point. On the one hand, seasonal rules show that February is the month with the best winning odds for Q1. On the other hand, more importantly, the period from March to April is a time when economic data and resident funds enthusiasm are prone to change. If the market position is not high before the Spring Festival, the buying point is relatively safe. However, from a trading perspective, the start of a new round of increase may be relatively slow, and it is not necessary to rush to buy. This is because: 1. If it is just a seasonal game, most of the market fluctuations are not significant, but if there is a significant upward trend in Q1, it is necessary to observe the impact of the economic turning point or the residents' funds. It is difficult for January economic data to change significantly, and there is a possibility of significant change from February to June. 2. Referring to the experience of 2019-2021, each time the trading volume declines, the market will rise slowly at the beginning of the restart. Orient: A turning point has already appeared in the A-share market. Orient pointed out that overall, a turning point has already appeared in the A-share market. With various economic policies gradually being implemented, the possibility of economic stabilization and recovery has increased significantly. More industries and companies will experience a trend reversal. The technological revolution led by artificial intelligence is developing rapidly, and Chinese companies have already taken a leading position in many fields. From an investment perspective, the broad technology sector, especially ShenZhen New Industries Biomedical Engineering, which is on the eve of an industrial explosion, will be the main theme of the market in the near future and is worth investors' attention. Hot Sectors 1. The large financial sector was active at the beginning The large financial sector was active at the beginning, with Hubei Biocause Pharmaceutical rising for two consecutive days. ChinaLin, Guosheng Financial Holding Inc., Tianfeng, I2SOFT, Shenzhen Infogem Technologies, and others opened high collectively. Comment: On the news front, the Central Financial Office and other six departments jointly issued the "Implementation Plan for Promoting the Entry of Medium and Long-term Funds into the Market", specifying the increase in the proportion of A-share investments by commercial insurance funds and the stability of the national social security fund's equity assets. 2. Agricultural sector fluctuated and rose The agricultural sector fluctuated and rose, with Wanxiang Doneed hitting the limit up, KANGNONG SEED rising by over 10%, and Gansu Dunhuang Seed Group, Winall Hi-tech Seed, Hefei Fengle Seed, and ShanDongDenghai Seeds following suit. On the news front, the "Comprehensive Revitalization Plan for Rural Areas (2024-2027)" was recently issued. The plan proposes that by 2027, substantial progress will be made in the comprehensive revitalization of rural areas, and modernization of agriculture and rural areas will take a new step forward. By 2035, decisive progress will be made in the comprehensive revitalization of rural areas, with basic realization of agricultural modernization and basic modern living conditions in rural areas. 3. Copper high-speed connectors concept continued to strengthen The concept of copper high-speed connectors continued to strengthen, with Nanjing Huamai Technology hitting the limit up for five consecutive days, Xinya Electronic hitting the limit up, and Shenyu CommunCommunication Technology Inc., Shenzhen Woer Heat-shrinkable Material, Dongguan Dingtong Precision Metal Co.,Ltd., Broadex Technologies, Suzhou Recodeal Interconnect System, Kingsignal Technology and others have increased in value.Review: On the news front, overnight US stocks saw copper giant Freeport-McMoRan rise by 7%, reaching a historic high. The company's adjusted net income for the fourth quarter was $6.952 billion, compared to market estimates of $6.432 billion. Adjusted operating income for the fourth quarter was $9.657 billion, compared to market estimates of $8.853 billion. It is expected that sales in the first quarter will be between $4 billion and $4.1 billion, with market estimates at $39.6 billion. This article is reprinted from "Tencent Stock Selection", GMTEight editor: Wang Qiujia.