Market risk appetite is unlikely to improve in the short term; beware of high premium risks in oil and gas themed products.

On March 27, People’s Financial News reported that on March 26, the “seesaw” market played out again. Against the backdrop of rising oil prices, the S&P Oil & Gas ETF and the Energy and Chemical ETF saw significant gains, while software and precious metals ETFs led the pullback. It is noteworthy that the S&P Oil & Gas ETF by Welling did not effectively decline due to premium, and trading was suspended again during midday on the 26th. The S&P Oil & Gas ETF by Harvest saw trading volume exceed 13 billion yuan on the 26th, setting a new historical high, with a premium rate exceeding 14%. According to the post-market announcement on the 26th, to protect investors’ interests, the S&P Oil & Gas ETF by Harvest and several other high-premium on-market oil and gas themed funds will be suspended from trading starting at the open on the 27th until 10:30 AM that day. Regarding the recent market adjustment, industry insiders analyze that it is essentially triggered by externally driven liquidity negative spiral situations. Currently, the intrinsic recovery power of the A-shares is not lacking, but it is suppressed by disturbing factors. Considering that short-term geopolitical conflicts may continue to escalate, market risk appetite is unlikely to improve in the short term. It is advised to maintain a neutral and low position in the near term and overall reduce liquidity exposure in the portfolio. (China Securities Journal)