At present, the market has reached a critical moment, and CITIC Securities recently announced that A shares are standing at the starting point of the annual market. On September 26th, at the beginning of this round of market, CITIC Securities issued a document late at night with only one word "dry", which sent a strong signal to the market. At the strategy meeting, CITIC Securities once again emphasized the key words of "annual level" and "marathon market", showing its confidence that A shares will usher in a big market.
CITIC Securities predicts that A-shares will experience an annual upward trend by 2025. At present, the market is at the starting line of this marathon, and the market style will gradually shift from individual investors to institutional investors. Excellent growth, domestic consumption, mergers and acquisitions will become three important tracks. A new round of credit cycle is expected to come, and macro prices will rebound. These factors are conducive to the upward profit of listed companies.
Recently, the market turnover has reached 2 trillion yuan per day, which is obviously active compared with a few months ago, and the fundamentals have also shown a good signal. After the collective surge on October 8, the market entered a shock stage, which was a big test for investor confidence. CITIC Securities has clearly seen more this time, showing some courage. The next key is the follow-up of subsequent incremental funds.
According to data released by the central bank, household deposits increased by 11.28 trillion yuan in the first 10 months of this year, but monthly household deposits dropped by 570 billion yuan in October. The market speculated that this fund mainly flowed to stocks and funds. There are two main reasons behind this: first, the deposit interest rate continues to decline, and second, the capital market attracts gold.
For the funding in 2025, CITIC Securities believes that incremental funds are on the way. The new instrument swap facility (SFISF) and stock repurchase and refinancing are expected to bring about 400 billion yuan of incremental funds to A shares in 2025. In addition, the overall A-share position of insurance capital is low, the current position of private placement is below the historical median level, and the allocation of foreign capital to China’s assets is still low. Public Offering of Fund may face redemption pressure in the short term, but it will be more active to enter the market after the house price and financing signals are clear. ETF will become an important tool for individual investors and institutional investors to enter the market by relay, and the A-share market will maintain a relatively stable net inflow of funds in 2025.
ETF has become an important tool for asset allocation. In the past two years, passive products have gradually replaced active products. According to the fund’s third quarterly report in 2024, the market value of A shares held by passive index funds exceeded that of active equity funds for the first time. ETF is not only the choice to support the market, but also an important tool for active funds to participate in the market. At present, the scale of ETF in A-share industry accounts for 25%, which has become an important tool to capture industry beta. At the same time, new broad-based ETFs, such as CSI A500, have a more even distribution of industry weights, which has attracted high attention.
Looking back at history, the excess return of active funds basically coincides with the improvement of macroeconomic fundamentals. In the future, with the fundamentals warming and the new round of industrial trends clear, active products are expected to outperform the market again.
