Summary of this issue

Key recommendations

At the end of September, the scale of foreign reserves fell by US$22.7 billion month-on-month, and the exchange rate of RMB against the US dollar remained stable

The PMI of the construction industry bucked the trend and rebounded in September, and the improvement in infrastructure investment in Q4 may be better than expected

Market Comments

Market Comments: The National Day holiday news is mixed with bulls and shorts, and the operation is not stable Radical, it is advisable to control short-term swing operations

Macro perspective: The central bank lowers the deposit reserve ratio of some financial institutions by 1 percentage point

Food and beverage industry: The growth rate of the food and beverage consumption index has picked up, suggestions Laying out industry leaders

Futures information

Metal energy: gold 265.15, down 0.99%; copper 50050, down 0.32%; rebar 3933, down 2.86%; rubber 12320, down 0.28% ; PVC index 6715, up 1.05%; Zheng Chun 3212, down 0.77%; Shanghai Aluminum 14350, down 1.17%; Shanghai Nickel 104380, down 0.46%; Iron ore 496.0, down 0.90%; Coke 2260.0, down 0.55%; Coking coal 1267.5 , down 0.04%; crude oil 563.6, up 1.75%;

Agricultural products: soybean oil 5826, flat; corn 1892, down 0.26%; palm oil 4724, down 0.30%; cotton 15890, down 0.53%; Zhengmai 2563, up 0.20%; sugar 4983, down 0.08%; Apple 11854, up 1.81%;

Exchange rate: EUR/USD 1.16, down 0.15%; USD/RMB 6.89, down 0.04%; USD/HKD 7.82, up 0.11%.

Key recommendations

1. At the end of September, the scale of foreign reserves dropped by US$22.7 billion from the previous month, and the RMB exchange rate against the US dollar remained stable

Event: On October 7, the National The latest foreign exchange reserve scale data released by the Administration of Foreign Exchange shows that as of the end of September 2018, my country's foreign exchange reserve scale was US$3.087 billion, a decrease of approximately US$22.7 billion or 0.7% from the end of August. This is also the largest increase in the scale of foreign exchange reserves since August last year. new low since.

Comments: Central Bank data show that my country’s official foreign exchange reserves in September 2018 were US$3.087025 billion, a decrease of US$22.691 billion from the previous month, with negative growth for two consecutive months. We believe that there is still depreciation pressure on the RMB against the US dollar in September. Cross-border capital flows are generally in the direction of outflow, and it is expected that the central bank will still have a lot of room to use cross-border capital management tools in the future. The RMB exchange rate still faces depreciation pressure as the U.S. dollar index rises, but the room for depreciation is limited. One of the ultimate goals of the central bank's monetary policy is to maintain the balance of international payments. The exchange rate of the RMB against the US dollar is an intermediary tool to achieve this goal. Once reserves decline continuously and rapidly, the central bank may intervene in the exchange rate market to maintain the stability of the balance of payments, and the RMB will regain its balance. Return to the appreciation channel. Since the beginning of this year, in the face of the complex external environment, our country has adhered to the general tone of work of seeking progress while maintaining stability, and has further promoted reform and opening up. The economy has maintained an overall stable and stable trend, the economic structure has continued to be optimized, and the flexibility of the two-way fluctuations of the RMB exchange rate has continued to increase. The balance of international payments is basically balanced, and the scale of foreign exchange reserves remains generally stable. Although the external environment still faces great uncertainty, our country's economy has strong adaptability and ability to withstand external risks, and its solid fundamentals will continue to provide a solid foundation for the smooth operation of the foreign exchange market. Due to the combined effects of domestic and foreign factors, the scale of my country's foreign exchange reserves is expected to remain stable amid fluctuations.

(Investment consultant Zhong Yanling’s registered investment consultant certificate number: S0260613020024)

2. The construction industry PMI bucked the trend and rebounded in September, and the improvement in infrastructure investment funds in Q4 may be better than expected

Event: On September 30, the National Bureau of Statistics released China’s manufacturing purchasing managers’ index (PMI) for September. Data show that the PMI of the construction industry in September was 63.4%, bucking the trend and rising significantly by 4.4 pct to hit a new high for the year. At the same time, the new construction orders index increased by 6.1 pct to 55.7%, returning to above the critical point.

Comments: The construction industry entered the peak production season in September, with the business activity index at 63.4%, up 4.4 and 2.3 percentage points month-on-month and year-on-year respectively, rising to a high and prosperous range, and construction industry production activities accelerated. From the perspective of market demand, the new orders index in the construction industry was 55.7%, an increase of 6.1 percentage points from the previous month. Market demand in the construction industry continued to grow steadily. The pick-up in the construction PMI in September shows that the construction industry still maintains rapid growth, while the bottoming out of the new orders index is consistent with policy directions such as accelerating the issuance of local bonds and making up for shortcomings in infrastructure. The growth rate of infrastructure investment is expected to pick up in the later period. If the economy still faces greater downward pressure in Q4, infrastructure will still be the most effective hedge to stabilize growth, and the improvement in infrastructure investment in Q4 may be better than expected. Investors are advised to pay attention to low-valued infrastructure/design companies whose third-quarter performance growth is expected to exceed expectations.

(Investment Consultant Zhong Yanling’s registered investment consultant certificate number: S0260613020024)

Market Comments

1. Market Comments: The National Day holiday news is intertwined with bulls and shorts, and operations Don’t be aggressive on the move, it’s better to control your positions in short-term swing operations

The news during the National Day holiday is mixed with both bulls and shorts. The domestic central bank lowered the deposit reserve ratio of some financial institutions by 1 percentage point, and the external stock market experienced a large fluctuation in the callback. The overall news The internal warmth and external coldness will inevitably affect the overall long-term strength of the short-term market. It is expected that the market will be dominated by shocks this week. In terms of operation, it is recommended to adopt a sell high and buy low strategy, increase the frequency of band operations, and focus on the wrongly sold varieties with clear performance growth and reasonable valuations on dips. It is recommended to pay attention to big finance, big consumption, infrastructure, etc. There are risks in the stock market, so investment needs to be cautious.

(Investment consultant Gu Zhixiong’s registered investment consultant certificate number: S02606611020066)

2. Macroscopic perspective: the central bank lowered the deposit reserve ratio of some financial institutions by 1 percentage point

In order to further support the development of the real economy, optimize the liquidity structure of commercial banks and financial markets, reduce financing costs, and guide financial institutions to continue to increase support for small and micro enterprises, private enterprises and innovative enterprises, the People's Bank of China decided to Starting from October 15, 2020, the RMB deposit reserve ratio for large commercial banks, joint-stock commercial banks, city commercial banks, non-county rural commercial banks, and foreign-funded banks will be reduced by 1 percentage point, and the medium-term lending facility (MLF) that expires on that day will not be renewed. Do.

(Investment consultant Gu Zhixiong’s registered investment consultant certificate number: S02606611020066)

3. Food and beverage industry: The growth rate of the food and beverage consumption index is picking up, and it is recommended to be the industry leader

< p> From September 10th to September 14th, the food and beverage index fell by 0.4%, outperforming the Shanghai and Shenzhen 300 by about 0.7pct. Among the sub-sectors, dairy (2.7%), wine (1.9%), and beer (1.3%) had the largest increases. forward. In August 2018, the growth rate of total social consumption rose to 9.0%, indicating an obvious recovery trend. Except for automobile consumption, which continues to be sluggish (-3.2% in August), the growth rates of other consumer sub-sectors have increased. From the perspective of sub-sectors: grain, oil and food increased by 10.1% in August, and tobacco and alcohol increased by 7.0%. The recovery trend is obvious; The growth rates of catering (9.7%) and catering above designated size (7.5%) also rebounded slightly. The rebound in growth in August boosted market confidence. At the same time, we observed that the three major consumer indices (confidence, satisfaction, and expectations) in July rose month-on-month, which reflected that the market consumption environment has not been greatly affected. Combining the data from July to August can eliminate the impact of monthly data fluctuations: total social consumption growth from July to August was 9.0%, the same as the growth rate in 2Q18; catering and limited-edition catering increased by 9.5% and 6.8% respectively from July to August. The speed has rebounded slightly compared with 2Q18. Overall, consumption data is basically stable, and the volatility affected by the economy is relatively small. Liquor has entered the Mid-Autumn Festival and National Day stocking stage, and consumption has increased. Investment Portfolio: Prefer investments with stable performance growth and low valuations.

(Investment consultant Gu Zhixiong registered investment consultant certificate number: S02606611020066)