All three major international indices are in A industry: large-scale inflows of foreign capital will be welcomed in September

category:Finance
 All three major international indices are in A industry: large-scale inflows of foreign capital will be welcomed in September


After the inclusion factor of 25%, the weight of A shares in S&P emerging market global benchmark index is 6.2%, and that of Chinese market (including A shares, Hong Kong shares and overseas listed shares) is 36%.

The S&P Dow Jones Index said that the list and weight will change before September 23, and investors will remain on the final list.

In addition, the official website of the S&P Dow Jones Index also said that it would not be included in the GEM for the time being, and that market participants would be consulted before it was included in the GEM.

It is noteworthy that as early as the second half of last year, the S&P Dow Jones Index Company has publicly released a signal to include qualified Chinese A shares in the global benchmark index of emerging market classification.

On December 31, 2018, the S&P Dow Jones Index officially announced the selection of A-share listed companies, a total of 1241 A-share listed companies were selected. According to the 25% inclusion factor, A shares account for 0.57% of the Dow Jones Standard & Poors Global Benchmark Indices, classified as emerging markets.

Judging from the recent path of three major international indices to enhance A share, September will be the time for large-scale inflows of foreign capital.

On the one hand, MSCI raised the weight of the secondary NA factor from 10% to 15%, and further mentioned 20% before the end of the year. On August 24, FTSE Russell also announced plans to increase the inclusion factor of Chinas A shares from 5% to 15%, which came into effect on September 23.

Plus, the S&P Dow Jones Index, which also came into effect on September 23, is included in the A-share list, and these moves are expected to bring incremental capital to the A-share market.

Guohai Securities forecasts that the three major indices into A shares will bring about 100 billion incremental funds. According to the latest data of foreign shareholdings released by the Central Bank, by the first half of 2019, the total size of A-shares held by foreign institutions was 1.65 trillion yuan, accounting for 3.72% of the market value of A-shares in circulation; the domestic market will usher in the synchronous growth of the three major indices from August to September, and conservative estimates will attract a total of more than 200 billion yuan in growth. Guohai Securities said.

Net inflow of northward funds in seven trading days

After a brief silence in the second quarter, the northward funds were again active in the third quarter. Especially since September, the purchasing margin of northward funds has increased significantly.

On September 6, the net inflow of funds to the North was 8.524 billion yuan, the seventh consecutive trading day. In the five trading days of last week alone, the total net inflow of northward capital was 28.09 billion yuan, the largest one-week net inflow since November 2018.

Industry insiders believe that the large inflow of northward funds may be related to the centralization of several international index companies into effect from August to September. It is worth noting that since the second half of this year, there have been some new changes in northward capital inflows compared with the past: firstly, the differentiation degree of northward capital allocation to various styles has converged; secondly, in the recent process of foreign capital inflows, consumer stocks and technology growth stocks have kept pace with each other. Choice data show that, from September 2 to September 5, the northward capital holdings in gold, precious and silver industry changed by 0.95 percentage points, while the high emerging, Guoxing Optoelectronics, TCL Group and other technology stocks increased more rapidly. Among the Shanghai Stock Exchange Standards, Gujiajia Homes northward capital holdings increased the most, while the blue-chip stocks in manufacturing industries such as Chinalco International, Qilian Mountain and Sany Heavy Industries increased significantly. Source: Guo Chenqi_NBJ9931, responsible editor of Beijing Youth Daily

Industry insiders believe that the large inflow of northward funds may be related to the centralization of several international index companies into effect from August to September.