"It probably can," Bao Yongquan replied. "In today's market, the influence of an institution like Huayi Capital is still quite significant.
Putting aside the fundamentals of the real estate sector—which are already gradually improving, and whose corresponding core property stocks are inherently undervalued—just looking purely at market sentiment, and considering President Su of Huayi Capital's ability to guide market-following funds and the vast crowd of following retail investors, this wave of the 'real estate' market rally should possess sustainability.
Furthermore, market volume expanded quite a bit today, and on the post-market Dragon and Tiger Lists, the main capital buying in wasn't limited to just 'Huayi Expedition No. 1' under Huayi Capital.
Other major institutional capital was also actively intervening in the core stocks of the real estate sector.
And based on the current market discussion heat following the two exchanges' close, after the sentiment ferments over the upcoming weekend, I estimate that when the market reopens next Monday, even more major institutional capital and speculative trading capital will intervene in this main theme field."
"Under the current economic landscape, do you think the real estate market can sustain another wave of a bull market?" Hearing Bao Yongquan's words, Yang Shengfan paused for a moment and continued to ask, "China's urbanization rate is already quite high, and following the price increases of the past few years, housing prices are already at relatively high levels.
Logically speaking, at this housing price level, people's purchasing power is relatively limited, and foreseeable demand shouldn't be enough to support the property market in sustaining a bull run."
Bao Yongquan thought for a moment and replied, "From the current perspective, the 'supply-side' reform implemented by the state in industrial sectors like 'steel and coal' seems to have already yielded initial results. Whether people admit it or not, China's economy is closely tied to the real estate market.
Ever since the state's housing and urban-rural development authorities gradually relaxed regulations on the property market starting last year, it indicates that at this stage, the state hopes the property market can sustain a bull run, and continue to drive domestic demand development, boost the economy, and elevate everyone's confidence in economic growth through the 'mega-infrastructure' strategy.
As for the demand and public purchasing power you mentioned, Director Yang...
I don't think that's a problem either.
Based on China's birth rate and annual demographic structure changes, the peak of China's birth rate happened precisely between 1987 and 1997. In other words, the population group aged around 20 to 30 in current society is the highest it has been in these years.
The concentration of a young population also means this is the peak period for marriage-eligible demographics.
Due to changes in social values, the influence of online media, and the relaxation of the household registration (hukou) system over recent years, a massive wave of rural populations has migrated to towns and cities.
This has caused the notion that 'getting married requires buying a home in the city' to gradually become deeply ingrained.
In other words, I believe that during the peak period of the marriage-eligible demographic, the rigid demand for buying homes is an extremely massive group.
Facing current market housing prices, this group might not be able to afford it alone, but buying a home... is usually not a one-person affair; it's a family affair.
And if we use a single family's purchasing power as a unit, then current housing prices haven't quite reached the point of being 'completely unaffordable'."
"So you believe... that the current red-hot scene across the national property market is sustainable?" After listening to Bao Yongquan's analysis, Yang Shengfan pondered for a moment and continued, "You think that based on current housing prices, the national property market can stage a roaring bull market just like before?"
Bao Yongquan said, "I believe it's inevitable."
"So certain?" Yang Shengfan was slightly surprised.
Bao Yongquan smiled and nodded, saying, "Over the past twenty years, the real estate market has created numerous wealth myths. As the entire market has developed to where it is today, Chinese people have unshakeable confidence in housing prices. What's more... in any market, the following crowd cannot be underestimated.
Under unshakeable confidence, once housing prices experience a skyrocketing surge in a short period of time, then people following the trend to buy will come in an endless stream.
This is just like how retail investors in the stock market always chase the rise and sell the fall.
Since policy supports it, local governments have a demand for it, the public has a demand for it, and meanwhile, the financial market is languishing, with hot money needing a speculative outlet capable of carrying massive capital, then, combined with our country's national conditions, once real estate gains momentum, it basically turns into a bull market."
"It looks like... we'll have to work overtime this weekend," Yang Shengfan smiled and said. "President Su from Huayi Capital is truly impressive; he always manages to discover major market main-theme rally opportunities in a timely manner and guide the sentiment out at the right moment."
Hearing Yang Shengfan's words, Bao Yongquan was stunned and asked, "Is Director Yang planning to change his investment strategy and intend to follow up by investing in the 'real estate' main theme?"
Yang Shengfan helplessly replied, "No matter what time it is, you have to respect the market. Since the market trend has already helped everyone make a choice, we can only follow along. As for the core main theme of [The New Energy Industry Chain], long-term... I am still bullish on it, but its mid- to short-term trend is truly terrible. We have no choice but to temporarily avoid this sector, embrace the market's main theme, and thereby mitigate the net asset value drawdown of our fund products."
"Understood," Bao Yongquan nodded and said, "Then I'll immediately have everyone prepare the relevant materials for the 'real estate' main theme, have everyone work overtime this weekend, and formulate a relevant trading plan and target stocks for investment."
"Sounds good," Yang Shengfan replied. "I estimate that this weekend, many investment institutions will thoroughly study the future market rally trends of the real estate sector."
As Yang Shengfan gradually shifted his investment mindset amidst Bao Yongquan's analysis...
At the exact same time...
Just as Yang Shengfan anticipated, across Shanghai, quite a few investment institutions—after reviewing today's market Dragon and Tiger List data and discovering that Huayi Capital had aggressively increased its positions in real estate sector stock shares—also turned their gazes toward the real estate sector and rapidly began to carefully study the investment potential of this market main theme.
Among them was Shanghai's Huairui Fund Management Company.
Inside the trading department of the 'Huairui Performance Elite Growth No. 1' fund product, Fund Manager Song Shaopu had already undergone internal discussions to formulate a subsequent trading plan and investment strategy.
He intended to build heavy positions in real estate sector stocks starting next Monday, while simultaneously turning his gaze toward the 'black resource series' stock investment sector.
"Xiao Jia, has our market research department fed back any research data yet?" Song Shaopu opened his computer.
Failing to find the latest operating data changes of domestic major coal and steel enterprises as well as the latest overall industry capacity change data in the company's internal resource repository, he couldn't help asking the fund trading team leader Jia Yongxiang, "Why is it that what I find in the database is still last quarter's research reports?"
Jia Yongxiang replied, "The market research department probably hasn't updated it. Previously, our focus and investment mindset were both on the 'new energy industry chain' and 'consumer Baijiu' industry sectors, and we didn't pay much attention to black-series resource sectors like coal, steel, and non-ferrous metals. So... I estimate the colleagues in the research department haven't updated the data and information in this regard."
"What's going on here?" Song Shaopu muttered, "Nobody is tracking the data for these industries?"
With that, he immediately dialed the head of the market research department.
About 40 minutes later, the head fed back all the relevant industry data he requested, along with the latest market research reports on the target companies he wanted.
Song Shaopu opened the latest data and information fed back by the research department head, looked at it carefully, and after a moment, finally raised his head and said, "Sure enough... Huayi Capital's sense of smell for market main-theme rallies is truly sharp. Judging from various research reports and the latest industry capacity changes, under the guidance of the state's strongly pushed 'supply-side reform' policies, both the coal industry and the steel industry have seen their current statuses improve to a certain degree."
"Does that mean... today's market phenomenon where 'coal dances and metals surge' wasn't just blind speculation by capital?" Jia Yongxiang asked, "It's indeed caused by changes in industry fundamentals?"
Song Shaopu nodded and said, "From the current perspective, indeed so."
"I really didn't expect that the breakout point for this round of the market would actually lie in these 'big, blunt, and rough' industry sectors like coal, steel, and non-ferrous metals, as well as the real estate sector," Jia Yongxiang said. "Previously, it seemed no capital in the market could look favorably upon stocks in these sectors, resulting in very few institutional funds or lurking hot money groups in these domains. Now... I'm afraid everyone is going to scramble to grab shares."
"Grabbing shares isn't quite the word," Song Shaopu said. "Although the current situation of severe overcapacity in coal and steel has improved slightly, whether the industry can subsequently crawl out of the quagmire and return to high prosperity peaks still carries massive uncertainty. We can only take it one step at a time."
"At least the expectation gap is there, right?" Jia Yongxiang said.
Song Shaopu nodded and said, "That's for certain. Otherwise, Huayi Capital wouldn't have shifted its mindset and built heavy positions in this direction."
"Then we..." Jia Yongxiang stared at Song Shaopu and asked, "should we execute our strategy shift centering on the 'real estate' sector main theme, or build positions centering on the coal and steel sectors?"
Song Shaopu thought for a moment and said, "Let's stick with the 'real estate' sector. Compared to the coal and steel sectors, the rally certainty of the real estate sector is obviously higher. Of course, coal and steel fell hard enough previously, and if industry fundamentals reverse, the expectation gap is also big enough. It's quite necessary for us to lay out our investments in this aspect going forward."
"What about the consumer, pharmaceutical, and new energy sectors?" Jia Yongxiang asked.
Song Shaopu said, "Appropriately reduce holdings of profit-taking shares and clear out some positions. Although consumer and pharmaceutical are core bear market main themes, after surging for a wave over the past half-year, they're probably going to undergo corrections for quite a long time. It's better for us to clear out some positions first and play the current main themes that carry expectation gaps."
With only four to five months remaining in the year, the fund net value performance of the fund products they managed did not exhibit outstanding results compared to other fund products of the same scale within the industry.
As for their fund's current net value ranking, among mutual funds of the same scale, it still sat in the lower-middle tier of the list.
Naturally, Song Shaopu was not satisfied in his heart with such results.
As a fund manager with some ambitions, his requirement for himself was that the net value performance of the fund products he managed must at least enter the industry's top ten for long-term rankings, as well as rank first internally within Huairui Fund Management Company. Only then would he live up to his title as a gold-medal fund manager.
Furthermore, the better the fund's net value performance, the faster its scale could expand.
He hoped through his own efforts to turn the 'Huairui Performance Elite Growth No. 1' fund he managed into the signature brand of the entire Huairui Fund Management Company, making it a 100-billion-scale star fund product within the industry.
"Mmm, I think so too," Jia Yongxiang nodded and said, "I'll immediately modify the strategic plan."
As major institutional players across the industry turned their gazes toward 'mega-infrastructure' main theme sectors like real estate, steel, coal, and cement... and adjusted their investment strategies accordingly, over the two days of the weekend, market investment sentiment remained in a red-hot state.
Amidst the discussions of countless investor groups and numerous retail investor groups on online platforms, there felt as though a bull market had suddenly arrived once again.
Right in the midst of this fiery sentiment where investor views on subsequent market prospects universally turned optimistic, August 1st arrived, marking the start of a new week.
Under the gaze of countless people, the A-share market and the Hong Kong market simultaneously ushered in the opening of trading.
Witnessing the sentiment fermentation over the weekend and the popularization by various 'stock gods' in the market, the 'mega-infrastructure' main theme sectors—such as 'real estate', 'steel', 'coal', and 'non-ferrous metals'—which were heavily built upon and master-bought by Huayi Capital under Su Yi's management last Friday, were subjected to fierce attacks from various capital sources right at the open.
Among them, stocks heavily dominated by hot money, such as Pingdingshan Tianan Coal Mining and Bayi Iron & Steel, exhibited a market pattern where they gapped up sharply and hit their daily limit locks in mere seconds.
Faced with the market morphology where the sectors and core stocks heavily built upon by their own institution were being frantically snatched up by capital and surging higher step by step at the open, Su Yi couldn't help but gently knit his brows.
"President Su, what's wrong?"
Noticing the change in Su Yi's expression inside the 'Huayi Expedition No. 1' main fund trading room, Hou Baolong couldn't help asking.
"This market sentiment is a bit overstimulated," Su Yi said. "I really didn't expect sentiment to ferment so intensely in just a single weekend."
(End of Chapter)