Banxia Investment Li Bei’s Latest Statement: It Took More Than A Week To Reduce Positions In Real Estate Stocks, Which Affected The Net Worth

Private equity fund manager Li Bei, who has received widespread market attention, has spoken out again. The Banxia Macro View Report for May obtained by China Business News shows that private equity companies have further strengthened risk management measures and reduced their holdings of some large-cap real estate stocks previously held.

It is worth noting that in April’s monthly opinion, Li Bei had divergent views on real estate, emphasizing that he was optimistic about the completion of glass and other real estate.

In response to the sharp drop in net worth on the evening of May 22, Li Bei attached a screenshot of the official subscription account article of Banxia Investment, which showed that "the company has significantly reduced its positions to control risk exposure. The remaining positions are already relatively low.", leaving Some positions have both high odds and a good underlying trend. "

“The process of reducing positions and admitting mistakes and stopping losses took more than a week.”

According to the content of Private Equity Paipai.com, since this year, the five products of Banxia Investment that have data have recorded negative returns. Among them, the losses of Pinellia robust mixed macro hedging, Pinellia macro hedging, Pinellia macro hedging Phase III, Pinellia macro hedging Phase II, and Pinellia balanced macro hedging during the year were -7.19%, -5.26%, -5.54%, and -5.55 respectively. respectively. % and -6.9%.

The macro outlook report for the second half of May said that there was a major correction in macro hedging in the second half of May. On the one hand, the real estate stocks held and the back-end building materials and home appliance stocks related to real estate completion fell sharply month-on-month, and the decline was significantly greater than the index decline.

On the one hand, although the company's long commodity positions hold relatively healthy supply and demand in the medium term, they are affected by the periodic destocking downstream. In addition, one of its costs dropped too much, which dragged down the total cost and overall price, exceeding expectations.

The decline in the long commodity positions of Pinellia ternata investment is much greater than the decline in the short positions of the commodities held. The increase in fund size and the decline in position liquidity have made the impact costs of closing positions and stop losses relatively high, which is also one of the reasons for the large drawdowns.

Previously, Banxia Investment’s expectations for the economy were already very low. The last monthly report pointed out that economic momentum peaked in March and continued to decline month-on-month after April. However, the magnitude and speed of the economic downturn have still exceeded expectations.

First, demand in some important industries, such as real estate sales, has exceeded critical levels. In addition, the expected decline in energy prices driven by the supply side has driven the destocking behavior of multiple industrial chains.

In the future, Banxia Investment stated that it will further strengthen risk management measures. With the retracement of net worth in May, Banxia Investment will continue to reduce positions and stop losses within the risk control framework. As the risk budget decreases, the portfolio's VaR decreases, but stocks, on the other hand, see the liquidity of some of our holdings drop to a new level. For example, the average daily trading volume of several state-owned real estate stocks with a market value of tens of billions is only 30 to 40 million lots. The process of reducing positions, admitting mistakes, and stopping losses lasted one month. The impact on net worth persisted for many weeks.

As far as commodities are concerned, due to the rapid decline, the net value during the stop loss process also fell more. Overall, the correction in May was still within its risk management framework, "but the relatively large correction in a short period of time triggered malicious speculation in some media and also triggered its own reflection."

Real estate stocks, which had reduced their positions in Pinellia Investment, rebounded across the board on June 2. Tonglian data showed that the share prices of 119 stocks in the real estate sector rose that day, and only 9 stocks fell. Among them, the net inflow of real estate development funds was 1.7 billion yuan.

"The bottoming out of real estate prices and industry boom have been postponed to the first half of next year."

Li Bei said in Banxia's May macro view report that he still felt uncomfortable in the face of a sharp correction in a short period of time and should not do so. He also conducted internal discussions and reflections and took measures to further improve the risk control system. strengthen. It is not only necessary to control the total retracement, but also to better control the single-month retracement. Starting from June, in addition to the 15% total risk budget, a 7% monthly risk budget will be implemented simultaneously, and corresponding dynamic risk control measures will be implemented; the position concentration will be further reduced, and the upper limit of the nominal principal proportion of a single commodity will be reduced from 50% to 40%.

In addition to the position ratio, you should also pay attention to liquidity and control the position size to a level that can complete the opening/closing of the position within 1 week.

Li Bei believes that with the expansion of the research team and the increase in coverage varieties, more opportunities should be sought when conditions permit to form a more diversified and stable investment portfolio without affecting the return rate. It is entirely possible that the risks borne by individual industries and individual products will be further reduced. Strictly controlling single-month drawdowns can also prevent subsequent investments from becoming passive.

Looking ahead to the market, their expectations for the economy are already low and more cautious than the market average. They believe that economic momentum peaked in March and continued to decline month-on-month after April. However, the magnitude and speed of the economic downturn are still greater than expected, and demand in some important industries such as real estate sales has exceeded critical levels.

According to their calculations, as long as real estate sales remain at the level of the fourth quarter of last year (the annual residential sales volume after seasonally adjustment is about 1 billion square meters), as the supply side declines, the inventory-to-sales ratio will decline. It will start to turn downward in the first quarter of 2023, housing prices will stabilize and rebound, and the real estate industry will enter an upward cycle.

After hitting its lowest level in 10 years in the fourth quarter of last year, residents' confidence rebounded slightly in the first quarter of this year. Correspondingly, real estate sales rebounded in the first quarter of this year, and residents' credit also rebounded quarter-on-quarter. But starting from the second quarter, the trend declined sharply again. The seasonally adjusted annualized rate of real estate sales in April was below last year's fourth quarter. There was a further decline in May. It is expected that after the seasonal adjustment in September, the annualized rate of national residential sales will be only about 100 million square meters. In other words, the prosperity of the real estate demand side has fallen to a new low.

This also means that even if the supply-side contraction continues and sales continue to decline, judging from the inventory-to-sales ratio, the bottoming out of real estate prices and industry prosperity will be delayed by one year this quarter than originally envisaged. Approximately, by the first half of next year.

Li Bei believes that stocks require greater patience. Although the overall market valuation is already low and there is not much room for decline, stocks have not yet fully responded to the downward trend of economic momentum again, which contains more expectations and expectations for policies.

Domestic market participants hold high positions and are full of expectations for the policy. Recently, there have been rumors and expectations about policies in the market almost every two days. At the bottom of the last wave of market shocks, when the center of gravity shifted downward, it may have been achieved through expectations, disappointments, expectations again, and disappointments again.

The second risk for stocks is the outflow of existing funds. On the one hand, the stock is decreasing; on the other hand, three years ago was the peak issuance of three-year closed-period equity long-end funds (private equity, public equity). As these funds gradually mature and open up, redemptions and net outflows are inevitable.

Li Bei believes that according to the general laws of behavioral finance, the market's second bottom will often not create a V-shaped reversal in panic like the first bottom. Generally, the center of gravity of the shock moves downward, the fluctuation range narrows, and the bottom is quietly reached in despair. The right side of the bottom will also be entangled and repeated, and the reversal will be completed unknowingly.

Therefore, don’t rush when buying the dip. You need to have enough patience, wait for the conditions to mature, choose the right variety, and be proficient in using some tools.

Li Bei said in the monthly report that in the future, he will continue to hold some short- and medium-term treasury bonds as bottom positions, hold some low-valuation stocks with stable income and declining costs, and hold some low-valuation stocks. Relevance is low. Valuation stocks hold stocks that are at the bottom of some industries with low valuations and high dividends, and hold a few stocks with extremely high odds and high policy sensitivity. and uses stock index options to protect a net position of single-digit controlling interest.

Commodities currently hold a small amount of arbitrage positions and some hedging positions, and the long and short positions are basically balanced. Continue to look for long and short opportunities brought about by the differentiation of commodity fundamentals. Patiently wait for the upward repair opportunities brought by the next wave of small inventory cycles during the year.

标签： #Real Estate #Macro #Quarterly #Hold #Expectation