Essence of Brokerage Morning Meeting | Expectations of policies before the Two Sessions boost, focus on benefiting sectors

Yesterday, the market opened low and closed high, with the Growth Enterprise Market Index leading the gains and the Shanghai Composite Index reclaiming the 3000 point level. The three major indexes all closed higher on a monthly basis, ending a streak of six consecutive monthly declines. Overall, there were more stocks rising than falling yesterday, with over 5200 stocks in the market seeing gains and over a hundred stocks hitting their daily limit for gains. The turnover on the Shanghai and Shenzhen stock exchanges was 1.0526 trillion RMB, a decrease of 304.1 billion RMB from the previous trading day. At the close of trading yesterday, the Shanghai Composite Index rose by 1.94%, the Shenzhen Component Index rose by 3.13%, and the Growth Enterprise Market Index rose by 3.32%. The net inflow of northbound funds throughout the day was 16.603 billion RMB, with 8.642 billion coming through the Shanghai-Hong Kong Stock Connect and 7.962 billion through the Shenzhen-Hong Kong Stock Connect. At today's brokerage morning meeting, CICC stated that policy expectations were rising with the approaching Two Sessions, and they advised focusing on sectors that would benefit from this. China Securities Co.,Ltd. believes that policies will support the economy and that AI continues to exceed expectations. CITIC SEC suggested focusing on investment opportunities in the technology manufacturing sector catalyzed by policies related to new quality productivity. CICC: Policy expectations are rising with the approaching Two Sessions, focus on benefiting sectors CICC stated that recent domestic policies aimed at stabilizing economic growth, expectations, and the market have been actively implemented, with expectations of reform in some sectors rising. Since February, Chinese assets have performed well and led global markets. With the Two Sessions taking place in March, investors are paying more attention to policies supporting economic growth, particularly the strength and pace of fiscal policies for the year, and industry policies aimed at new quality productivity and promoting major industries such as new technology-enabled manufacturing. In terms of recommendations, the growth trend in technology is expected to continue. Since the beginning of the year, high dividend assets and technology growth styles have been favored in turns. Looking ahead, CICC believes that the excess returns may come from technology growth sectors benefiting from Chinese industrial policy support and clear industry trends. High dividend assets remain a solid option for medium-term investment value, but attention should be paid to micro trading structures and allocation rhythms in the short term. China Securities Co., Ltd.: Policies support the economy, AI continues to exceed expectations China Securities Co., Ltd. believes that the overall investment environment in A shares has significantly improved in terms of liquidity and market supervision. Following the comprehensive reserve requirement ratio cuts and unexpected cuts in the 5-year LPR rate in February, stability-related economic policies are expected to continue to be implemented before and after the Two Sessions, leading to further improvements in liquidity environment and market sentiment. With high dividend assets continuing to rise, pushing dividend yields down, the advantage of high prosperity growth styles is gradually showing. They recommend focusing on the consumer electronics industry chain (such as Huawei, MR), the AI industry chain, semiconductor equipment, storage, intelligent driving, coal, operators, and cyclical leaders. CITIC SEC: Suggest focusing on investment opportunities in the technology manufacturing sector catalyzed by policies related to new quality productivity CITIC SEC stated that in January 2024, the Central Political Bureau collectively studied and in the February Political Bureau meeting, it was mentioned that efforts should be made to accelerate the development of new quality productivity. New quality productivity was first proposed by the General Secretary during his investigation in Heilongjiang in September 2023. In general, new quality productivity is innovative and high-quality advanced productivity. From an industrial perspective, new quality productivity covers most strategic emerging industries and future industries. From a policy perspective, policies related to nurturing new quality productivity may focus on self-reliance in technology, digital economy, and green transformation. They recommend focusing on investment opportunities in the technology manufacturing sector catalyzed by policies related to new quality productivity, including semiconductor equipment, industrial machinery, new materials, AI, computational power, data elements, hydrogen energy, nuclear energy, energy storage, power grid equipment, and power IT. This article is reproduced from "Cai Lian She," GMTEight editor: Xu Wenqiang.