Stock Market Outlook: Asset Allocation Famine Spawned A New Bull Market

2016 is the first year of the 13th Five-Year plan, and the 13th Five-Year plan is the first five year plan since the current administration took office. It is also the last five year plan to achieve the first centenary goal.

In the fifth Plenary Session of the 18th CPC Central Committee, the CPC Central Committee's proposal on formulating the thirteenth five year plan for national economic and social development, which was just deliberated and passed, put forward the new objective requirement of economic growth in keeping pace with the rapid development of the economy and building a well-off society in an all-round way, and put forward the idea of "five great development" in terms of innovation, coordination, green, openness and sharing.

The historical task of this government after taking office is to realize the sustainable development of China's economy through pformation and pformation, and change the past development model that relies on the "three high" industries.

During the "13th Five-Year" period, economic growth will "improve quality", improve people's livelihood, increase residents' income, and narrow the gap between the rich and the poor.

Recently, the China foreign exchange trading center has announced the CFETS RMB exchange rate index for the first time. This will help to guide the market to change the habit of paying attention to the bilateral exchange rate between the RMB and the US dollar in the past, and gradually use the effective exchange rate calculated in reference to a basket of currencies as the main reference frame of the RMB exchange rate level, so as to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

Reference to a basket of currencies, compared with reference to a single currency, can better reflect the overall competitiveness of a country's goods and services, and also play a role in exchange rate adjustment of import and export, investment and balance of payments.

The signal of China's successful accession to the SDR is of great significance. It shows that China's great power status is recognized by the international community, which is conducive to internationalization of the RMB, is conducive to the strategy of Chinese enterprises going abroad, and promotes the strategic development of all along the belt so as to enhance domestic and foreign investors' confidence in China's economy and stock market.

After joining the SDR, the RMB needs to maintain the stability of the currency rather than the trend of depreciation, so as to enhance the international community's recognition of RMB.

In 2016, the driving force of the A share market returning to the bull market is still rising. The rising logic is that interest rates continue to descend and asset allocation is scarce.

First, the interest rate level in the whole economy is still declining, and our residents can invest more than 100 billion yuan in assets. Large class asset allocation will tend to invest in equity assets. Two, the pformation of economic reform will accelerate.

The release has raised the valuation level of many benefited industries; three, the logic of loose monetary policy has not changed, and the market liquidity is ample in the coming year.

General secretary Xi Jinping stressed that while moderately expanding the aggregate demand, we should focus on strengthening the structural reform of the supply side, strive to improve the quality and efficiency of the supply system, enhance the driving force for sustained economic growth, and promote the overall leap of China's social productive forces.

In 2016, the central economic work will focus on promoting structural reform from both sides of supply and demand and enhancing the driving force for sustained economic growth.

Among them, supply side management may be more important in 2016. The supply side reform takes innovation driven strategy as the core and system reform as the foundation, focusing on accelerating the cultivation of new kinetic energy and upgrading the traditional kinetic energy in two aspects, and promoting industrial pformation and upgrading by mass entrepreneurship and innovation, bringing more new industries, new formats and new models to emerge, and promoting the surplus capacity in traditional industries by eliminating the inferior, annexation and reorganization, and capacity output.

Smooth winter, towards the high-end industrial chain.

In 2016, the issue of A shares is about to enter the era of registration.

Registration reform is expected to be a long and meaningful market.

Registration system and corresponding matching punishment mechanism and operational delisting system are good for the market, conducive to the survival of the fittest in the capital market participants, and conducive to long-term, stable and healthy development of the market.

Whether from the perspective of pformation and upgrading or from the path of entrepreneurship and innovation, it is inseparable from the role of the capital market.

The approval will undoubtedly become a major initiative to encourage "double creation".

The introduction of registration system will optimize the resource allocation function of the capital market, increase the supervision and investigation of information disclosure, improve the shareholder litigation compensation mechanism, and ultimately optimize the investor structure and establish a buyer's conceited investment culture.

Recently, venture capital has frequently raised high-quality blue chips in real estate, finance and consumption. The fundamental reason is that the blue chip dividend yield is very attractive under the background of low interest rates. It is expected that the controlling rights of listed companies will be more common in 2016 by the end of 2015.

This also shows that industrial capital for blue chip long-term investment value recognition, investors can continue to focus on liquor, medicine, securities and other blue chips opportunities.

Small cap stocks are currently valued at a high level and are expected to differentiate in 2016, but new industry companies that truly have the ability to innovate, learn, acquire and choose industries will continue to earn a high valuation premium.

According to the spirit of "13th Five-Year plan" and the requirements of economic pformation, it is recommended to focus on related industries such as environmental protection, new energy, military industry, Internet +, VR and so on. Thematic investment can focus on state-owned enterprise reform, industry 4, and healthy China.