The past 22 was extraordinary, and the coming 221 is confusing. At this new year's eve, the research department of CITIC Securities (HKE63) launched the top ten prospects of the capital market in 221 based on comprehensive and objective research results, hoping to bring you some thoughts and enlightenment.

Outlook 1: The golden decade for equity investment in China has been opened. It is estimated that there will be more than 6,2 A-share listed companies in 23, with a total market value of 21 trillion.

The next decade will be a golden time window for the magnificent and vigorous development of China's capital market for three reasons:

First, China's sustained and healthy economic growth will constantly spawn a large number of high-quality enterprises and promote the continuous improvement of A-share fundamentals. China's economic restructuring is accelerating, and the characteristics of high-quality development are increasingly prominent. The increase in the proportion of emerging industries will comprehensively improve the market valuation system.

second, the acceleration of capital market reform will consolidate the institutional cornerstone of the direct financing system and significantly improve the efficiency of investment and financing. The comprehensive registration system has opened up the primary and secondary markets, the delisting system has accelerated the survival of the fittest, and the financial opening has been moving towards a higher level. With the listing threshold rising outside and falling inside, coupled with the centralized return of Chinese stocks in the "new economy", high-quality growth targets will gather in China capital market.

Third, incremental funds at home and abroad will increase the allocation of equity assets in China. The global share of China's economy has been increasing, and its core assets have performed well. The global trend of allocating A shares will continue to increase. Under the constraints of the new asset management regulations, the expected rate of return of fixed-income products such as wealth management continues to decline; Under the policy of "housing and not speculating", the investment attribute of real estate has decreased significantly, and the relative attractiveness of equity assets will be significantly enhanced. In the asset allocation of domestic residents' departments, the proportion of equity assets will tend to increase.

under the combined effect of the emerging high-quality enterprises, the more efficient capital market and the incremental funds that continue to enter the market, the golden decade of equity investment in China has been opened. It is estimated that there will be more than 6,2 A-share listed companies by the end of 23, with a total market value of 21 trillion.

Outlook 2: It is estimated that the GDP growth rate of China will be 8.9% in 221, and it will remain the main economy with the highest growth rate. In 23, China's nominal GDP will reach 2 trillion, surpassing the United States to become the world's largest economy.

It is estimated that in 221, the GDP growth rate of China will be 8.9%, and that of the G8 developed economies will be 4%. China will remain the world's leading economy with the highest growth rate. In cardinal utility, the growth rate of each quarter is "high before and low after", which is mainly driven by consumption and manufacturing investment. The easing policy will return to normal moderately. It is estimated that the year-on-year growth rate of social finance will slow down to 11%~12% in 221, and the fiscal deficit ratio will be moderately lowered to 3.2~3.3%.

China is ahead of Europe and America, while Europe and America are ahead of other economies. It is estimated that in 221, the global supply of vaccines in COVID-19 will be 5-5.5 billion doses, which can satisfy about 2.6 billion people. The vaccination progress in developed economies is faster than that in emerging economies. Overseas policies are still loose. It is estimated that in 221, the net expansion scale of the three major central banks in the United States, Japan and Europe will be 2.2 trillion US dollars, and the fiscal stimulus plan in Europe and America will be about 1.8 trillion US dollars.

China will become the most important engine of global economic growth in the next decade. It is estimated that the retail scale of social consumer goods in China will surpass that of the United States in 221, and its GDP will surpass that of the United States from 225 to 23. In 23, the nominal GDP of China will reach 2 trillion, accounting for about 22% of the global total, surpassing the United States to become the largest economy in the world.

Outlook 3: It is estimated that in 221, the comprehensive registration system and the new delisting rules will be implemented, and 65 A-share IPOs will be listed, with a financing scale of 55 billion and 4 delisted. It is estimated that the delisting rate of A shares will remain at around 2% from 222, and the survival of the fittest will be significantly accelerated.

the conditions for the reform of the main board registration system are ripe, and it is expected to officially land in the first half of 221, and the first batch of main board registration companies will be issued in the third quarter. It is estimated that there will be about 65 IPOs in the whole market in 221. Judging from the number of queue for you in each sector, the incremental IPOs are still mainly contributed by GEM and science and technology innovation board. It is estimated that the IPO fundraising scale of the whole market is about 55 billion, including 8 billion for the main board, 24 billion for the Growth Enterprise Market and 23 billion for science and technology innovation board. Under the background of moderate return to normal macro-policies, continuous inflow of incremental funds into A-shares, and the timing of listing by issuers, it is expected that IPO financing will have limited impact on market liquidity.

the delisting system reform has begun to solicit opinions, or will be officially launched in early 221. It is estimated that there will be about 4 A-share passive delisting companies in 221. After the transition period, it is estimated that the A-share delisting rate will remain at around 2% from 222, and the survival of the fittest will be significantly accelerated.

Outlook 4: It is estimated that the net inflow of A shares will be 75 billion yuan in 221, and the institutionalization trend will accelerate. In the next five years, the market value of foreign capital and public offering will reach 8.3 trillion and 9.1 trillion respectively, which is the largest source of incremental institutional funds, and the shareholding ratio of professional institutions will exceed 3%.

it is estimated that the net inflow of A shares in 221 will be 75 billion. Among them, the net inflow funds mainly include: 95 billion equity public offerings, 2 billion northbound funds, 2 billion insurance rights, 1 billion wealth management sub-rights, and 15 billion private placements and financial integration. The net outflow of funds mainly includes: IPO funds diversion of 55 billion, and net outflow of industrial capital reduction of 3 billion.

in the next five years, domestic residents and overseas funds will increase the allocation of A shares, and the proportion of products allocated by domestic residents will continue to increase. The proportion of shares held by professional institutions in the market value of A-share circulation will increase significantly, and the proportion of shares held by retail investors will decrease rapidly.

It is estimated that the market value of A-shares in free circulation will reach 15 trillion by the end of 225, in which the shareholding ratio of professional institutions will increase from the current 21.5% to 3.5%, the shareholding ratio of industrial capital will decrease from 5% to 47.5%, and the shareholding ratio of retail investors will decrease from 28.5% to 22%.

in the next five years, foreign capital and public offering will be the biggest sources of incremental institutional funds. By the end of 225, it is estimated that the market value of public offerings will increase from the current 4.1 trillion to 9.1 trillion, accounting for 8.7%; With the factor weight of A-shares included in the international index further increased, the market value of foreign-owned shares will increase from the current 2.8 trillion to 8.3 trillion, accounting for 8%; The market value of private equity holdings will increase from the current 2.1 trillion to 4.5 trillion, accounting for 4.1%; The stock market value of insurance will increase from the current 1.6 trillion to 3.7 trillion; The market value of bank wealth managers will increase from the current .3 trillion to 1.8 trillion.

Outlook 5: It is expected that the new asset management regulations will not be fully extended in 221, the relocation of residents' assets will be accelerated, equity assets will remain the most important allocation direction, and over one trillion yuan will flow into A shares through institutional products.

the transition period of the new asset management regulations will end in 221, and it is not expected to be fully extended. After the implementation of the new cash management financial management regulations, the development direction will basically be the benchmark money fund, which is expected to affect about 5.4 trillion stock products. The asset side of these products will turn to short-term and high-rated varieties, and the expected rate of return will decline rapidly. Other products subject to the expiration of the new asset management regulations will also experience a similar process of downward rate of return and scale compression.

With the decline in the yield of fixed-income products and the fixed tone of "housing and not speculating", equity assets will remain the most important allocation direction in the choice of domestic residents' asset reallocation in 221. It is estimated that in 221, more than one trillion residents' funds will flow into A shares through institutional product channels such as public offering, insurance and bank wealth management.

Outlook 6: It is estimated that the global commodity prices will increase rapidly in the first half of 221, and the central prices will continue to rise in the next three years. According to the annual average price, the expected price increase from high to low is: agricultural products, crude oil, basic metals, precious metals and thermal coal.

under the background of loose global liquidity and gradual economic recovery, demand recovery and supply bottleneck are superimposed, and it is expected that the central price of bulk commodities will continue to rise in the next three years. Demand side recovery is the most important variable in the commodity market in 221, but the supply bottleneck caused by the production cycle and the long-term low inventory will support the sustained upward trend of commodity prices in the medium term. Adding liquidity and inflation expectations, the overall commodity prices will perform better in the first half of 221.

according to the annual average price, it is estimated that the increase of commodity prices in 221 will be: agricultural products, crude oil, basic metals, precious metals and thermal coal. First of all, the weather affects the output, and the prices of agricultural products are improving, especially corn and soybeans with a large gap between supply and demand. Secondly, demand continues to recover, and Brent crude oil price center is expected to rebound to 55 USD/barrel in 221. Thirdly, the supply of copper mines is relatively rigid, and the low inventory magnifies the price elasticity brought by the recovery of demand, and the copper price rises periodically. Fourth, the rebound of inflation in the United States has become the core driving force for pushing up the price of gold in 221, and it is expected that the price of gold will return to the previous high point. Finally, the supply and demand are basically balanced and the coal price center is expected to remain stable.

Outlook 7: It is estimated that in the third quarter of 221, the US dollar index will fall below 85, the RMB will rise to 6.2 against the US dollar, the US dollar will enter a medium-and long-term depreciation stage, and foreign capital will allocate more assets to China.

It is predicted that the global share of the US economy will continue to decline from 22, and the US dollar will enter a medium-and long-term depreciation stage. In the future, the Federal Reserve's monetary easing policy will be stronger and last longer than that of the European Central Bank. After Yellen became the US Treasury Secretary, the orientation of "fiscal monetization" will be more clear, the supply of US dollars will be abundant, and the spread between Europe and the United States will lead to the weakening of the US dollar against the euro.

With the widespread vaccination, it is predicted that the virus infection coefficient will decrease in the second and third quarters of 221, and the global risk appetite will rebound, which will promote the trend of capital returning to risky assets such as non-US currencies. It is expected that the US dollar index will continue to decline after the New Year's Eve, falling below 85 in the third quarter. Then, with the slowdown of the Fed's expansion, the US economy will recover and the yield of long-term government bonds will rise, and the US dollar index is expected to stabilize and rebound in the fourth quarter.

Excellent epidemic prevention and control, high interest rate spread between China and the United States and leading economic growth will continue to support RMB appreciation. It is estimated that the peak of this round of onshore exchange rate appreciation will be around 6.2 in the third quarter of 221.

It is estimated that in 221, foreign capital will continue to allocate more China, and the net inflow of A shares through the land stock connect channel will exceed 2 billion, and the net inflow into the China bond market through the direct investment in the inter-bank bond market and the bond connect channel will exceed 1.5 trillion.

Outlook 8: It is estimated that the profit growth rate of Hang Seng Index in Hong Kong will reach 15% in 221. In the next three years, the Hong Kong market will usher in the centralized return of about 4 Chinese stock market leaders and enter the stage of rapid development, and the new economic leaders will become the new protagonists.

It is estimated that the profit growth rate of Hang Seng Index will increase from -6.5% in 22 to 15% in 221, and Hong Kong stocks will face the double repair of valuation and profit, attracting a net inflow of southbound funds of over HK$ 5 billion.

In the next three years, the Hong Kong market will concentrate on reaping the dividends from the return of China Stock Exchange. The Foreign Company Liability Act of the United States has come into effect. According to the contents of the Act, we judge that the Chinese stocks in US stocks whose financial reports cannot be audited will be banned from trading around the second quarter of 224. It is expected that the Hong Kong market will become the first choice for the return of Chinese stocks, and the number of Chinese stock market leaders representing the "new economy" will accelerate. It is estimated that the number of returns in the next three years will be around 15, 15 and 1 respectively. Secondary listed companies are allowed to be included in the Hang Seng Index and Hong Kong Stock Connect, and the "new economy" leader will replace the traditional sector and become the new protagonist of Hong Kong stocks in the future.

The return of China Stock Exchange has stimulated market enthusiasm, the interconnection mechanism between land and Hong Kong has been gradually improved, and the construction of Guangdong-Hong Kong-Macao Greater Bay Area has added momentum to Hong Kong. The role of Hong Kong's capital market as a hub at home and abroad will become more and more prominent and enter a stage of rapid development.

it is estimated that the profit growth rate of CSI 8 will increase from -2.8% in 22 to 14.7% in 221. Among them, the profit growth rate of non-financial sectors has increased significantly from 1.3% in 22 to 24.9%.

in 221, the domestic interest rate center will stabilize first and then fall. It is estimated that the operating range of the 1-year treasury bond yield will be 2.6%~3.2%, with a high level fluctuation in the first quarter, a downward trend in the second and third quarters and upward pressure in the fourth quarter.

safety is the premise of development. under the bottom line thinking, the main investment line under the overall national security concept has more lasting policy support, among which the high-quality track is worthy of medium-and long-term layout, focusing on five security areas: science and technology, energy, food, national defense and resources.

second, in the field of energy security, China will gradually establish a clean and low-carbon energy system to promote sustainable development, among which photovoltaic and wind power with great potential and high safety, and China's electrified supply chain in the global wave of automotive electric intelligence have the greatest development potential.

Thirdly, in the field of food security, the Central Economic Work Conference emphasized seeds for the first time and re-emphasized food security. It is predicted that the commercialization process of genetically modified corn is expected to accelerate, and the whole planting industry chain will usher in triple benefits of upward price, technological change and policy support.

fourth, in the field of national defense security, the 14th Five-Year Plan is an important stage for our army to accelerate the modernization of weapons and equipment after mechanization, and the military industry will continue its high prosperity and maintain rapid growth in the first year of the 14th Five-Year Plan.

this article is from citic securities.