CITIC Securities: Market Sentiment Recovery Driven by Three Key Factors, But Investment Allocation Awaits Clear Price Signals

CITIC Securities' latest research report highlights three key factors that are contributing to the recovery of market sentiment as September approaches. The report notes that the mid-year report release, changes in dividend expectations, and the easing of market liquidity pressures are all helping to alleviate the extremely pessimistic mood among investors. However, it also cautions that while these factors support a more balanced market style in the short term, significant allocation recommendations should be delayed until there is a clear turning point in price signals.The report suggests that domestic demand-boosting policies, expected to be launched in September, will likely be moderate in intensity. Additionally, the U.S. Federal Reserve's interest rate cut has been implemented, and the U.S. election situation is becoming clearer. However, a definitive turning point in price signals has yet to be seen, and more positive factors are needed to fully reverse market expectations.A-shares are expected to enter a temporary performance window after the mid-year report season risks have been resolved. The expansion of Huijin's share purchases and central bank intervention in the yield curve have temporarily shifted the consensus away from bullish dividend expectations, leading to a phased balance in market style. Moreover, the pace of foreign capital outflows has slowed significantly, which should improve the market liquidity environment.