Recently, with the coordinated efforts of the policies to stabilize growth, the Political Bureau of the CPC Central Committee, the Central Finance and Economics Commission, the Central Bank, the China Securities Regulatory Commission, and the China Banking and Insurance Regulatory Commission have all released positive signals to “escort” the capital market and boost investor confidence.

On the eve of the opening of the A-share market after the May 1st holiday, one party and two sessions made heavy noises. The China Securities Regulatory Commission emphasized that it should actively introduce long-term investors and make every effort to maintain the smooth operation of the capital market; the central bank proposed to make good use of various monetary policy tools, maintain a reasonable and sufficient liquidity, and guide financial institutions to better meet the financing needs of the real economy; the China Banking and Insurance Regulatory Commission said that encouragement Large banks and other high-quality listed banks with relatively high level of provisioning reduced the provision coverage ratio in an orderly manner, released more credit resources, and enriched the channels for insurance funds to participate in capital market investment.

Previously, the central executives held several meetings, emphasizing the maintenance of the smooth operation of the economy, and the requirement to regulate and guide the healthy development of capital.

On April 29, the Political Bureau of the Central Committee of the Communist Party of China demanded that the adjustment of macro policies should be strengthened, the economy should be stabilized, and efforts should be made to achieve the expected goals of economic and social development throughout the year. Keep the economy operating within a reasonable range. In terms of the capital market, the meeting pointed out that it is necessary to respond to market concerns in a timely manner, steadily promote the reform of the registration system for stock issuance, actively introduce long-term investors, and maintain the stable operation of the capital market.

On April 26, the 11th meeting of the Central Finance and Economics Committee emphasized that building a modern infrastructure system to achieve the unity of economic, social, ecological and safety benefits , serve major national strategies, support economic and social development, and lay a solid foundation for building a modern socialist country in an all-round way.

It can be seen that from the central government to all ministries and commissions are emphasizing maintaining the stability and consistency of policy expectations, adhering to the principle of stability, seeking progress while maintaining stability, strengthening responsibility, Be realistic and pragmatic, and make every effort to maintain the smooth operation of the capital market. This will not only help boost market expectations and investor confidence, but also release a clear signal of stabilizing financial markets and capital markets.

From a market perspective, on the last trading day before the May Day holiday (April 29), market confidence has rebounded, and the Shanghai Index has returned to 3,000 points. On the first trading day after the holiday (May 5), the Shanghai Composite Index continued to climb steadily, rising 0.68% that day to close at 3067.76 points.

In this regard, the author believes that the voices of the above-mentioned heavyweight meetings not only boosted market confidence, strengthened the main line of investment for stable growth, but also strengthened and stabilized A-shares. The logic of value investing in the market.

First of all, from a macro perspective, my country’s economy is stable and making progress. In the first quarter of this year, my country’s GDP grew by 4.8% year-on-year, which was higher than market expectations and achieved “stable door opening”. It fully shows that my country’s economy has strong resilience and vitality, the foundation of “stability” is constantly being strengthened, and the kinetic energy of “advance” is constantly gathering.

Secondly, in terms of performance, listed companies have seen steady growth in performance and continuous improvement in internal quality. According to the latest statistics from the China Association of Listed Companies, as of 17:00 on April 30, a total of 4,669 listed companies in the A-share market have disclosed their 2021 annual reports, with a total operating income of 64.97 trillion yuan, accounting for 56.81% of the total annual GDP; The net profit was 5.30 trillion yuan, a year-on-year increase of 19.56%, and the profitability was further improved. The role of listed companies as the “power source” for economic growth has continued to strengthen, and their status as the “basic market” of the real economy has been consolidated.

Finally, from the market point of view, the current A-shares have a valuation advantage, and the investment value is prominent. As of the close on May 5, the latest price-earnings ratio of the A-share market was 15.7 times, which was at the historical bottom.

At present, the policy signal has released enough space, and the first step to regain confidence has been taken. Looking at the long-term, the future of A shares is still promising.