Zheshang Securities: A-shares may benefit from an increase in risk appetite, with a style that leans towards small-cap growth.

Jinshi Data News on December 10th, Zhejiang Merchants Securities research report pointed out that the current inflation level is at the early stage of bottoming out and rebounding, with a large space for elastic recovery of effective demand. It is expected that there is still room for quantitative easing such as reserve requirement ratio reduction and interest rate reduction in monetary policy. In terms of major asset classes, A-shares may benefit from the rise in risk appetite, with a style more biased towards small-cap growth. The elasticity of technology stock valuation improvement may be relatively large. It is recommended to follow high-elasticity zones such as ChiNext, Sci-Tech Innovation Board 50, and Beishang 50. In the field of fixed income, the current risk-free interest rate level has gradually approached a new equilibrium level. It is expected that the 10-year government bond yield will generally show a fluctuating trend in the future, and it will be difficult for the long-term interest rate to show upward risks. Credit spreads are expected to narrow, and short to medium-term sinking qualifications in the region’s urban investment bonds may be the main direction of allocation.