What are the pro-cyclical sectors of stocks?

Pro-cyclical sectors include: finance, real estate, infrastructure, petrochemical, non-ferrous metals and so on. Pro-cyclical plate refers to the plate that follows the economic cycle. When the economy is prosperous, the industrial sector can also make better profits. When the economy is depressed, the profits of the industry sector are also depressed, and the profits of the industry sector are constantly switched according to the economic cycle.

On the contrary, the counter-cyclical industry sector refers to industries that do not follow the economic cycle. When the economy is booming, the industry sector may not get good profits, and when the economy is depressed, the industry sector may not be depressed. The countercyclical sectors include agriculture, medical care, film and television, entertainment and so on.

1. What is a procyclical plate?

Pro-cyclical plate refers to the plate that rises or falls with the periodicity of the market. The market is cyclical. For some sectors, when the market economy is booming, the income of the whole industry will be improved to a certain extent. When the market economy is depressed, these departments will also be affected by the market. As the market goes down all the way, these plates belong to procyclical plates.

Pro-cyclical sectors mainly include finance, real estate, building materials, infrastructure and other industries. The financial industry includes banks, brokers and insurance. When the economy is prosperous, more enterprises will borrow from banks, which will promote the performance of banks. For brokers, if the market economy is good and the market rises, more people will open accounts to invest and the performance of brokers will be better. So is insurance. When the economy is booming, the state will expand its investment in infrastructure, and the real estate market will prosper, which will also drive the rise of the surrounding building materials industry. These industries are greatly influenced by the economic environment and advance and retreat with the market economy.

From the valuation point of view, compared with the higher valuations of the medical, scientific and consumer industries that performed well in the past two years, the pro-cyclical industries represented by traditional industries have relatively low valuations, and the pro-cyclical sectors may benefit from low risk and valuation repair, and the low-risk preference characteristics are expected to continue to exert their strength. Especially in banking, building materials, machinery, home appliances and other sectors. From the perspective of profitability, according to the historical situation, if the economy continues to recover and the profitability of enterprises improves, then the pro-cyclical sector will also have the opportunity to rise. The impact of the epidemic has gradually weakened, and the domestic economy has developed in a good direction. Under the background of economic improvement, pro-cyclical industries are likely to improve their profitability.

From the perspective of industry allocation, the allocation of funds needs to spread risks as much as possible. However, when the valuation of hot plate and procyclical plate is obviously different, the allocation ratio of most funds to hot plate is relatively high, which is at a historical high, while the allocation ratio of procyclical plate is at a historical low. According to specific statistics, the allocation ratio of funds to medical organisms has exceeded 2 1%. Quite a high proportion, the allocation ratio of each procyclical plate is basically within 3%. Obviously, if we want to allocate funds, we must invest some funds in the pro-cyclical sector.

Second, the pro-cyclical plate continues to be hot when the structure is adjusted at the end:

At the end of each year, due to the coming of the assessment period, most institutions will carry out large-scale position adjustment. On the one hand, they will reduce their positions to recover their achievements, and on the other hand, they will begin to pave the way for the next year and exchange positions. The recent market structure is obvious, and the high probability is also related to the institutional layout;

At the same time, the Blue Book of Economy 20021issued by the Chinese Academy of Social Sciences pointed out that "due to the low economic growth base this year, considering the cross-cycle design and adjustment of macro-control and the uncertainty at home and abroad, it is estimated that China's economy will grow by about 7.8% in 20021year."

With the economic recovery next year, the pulling effect of consumption on economic growth will be further strengthened, and the prosperity of the pro-cyclical plate will continue to improve, so the market will be interpreted repeatedly.