Northbound funds actively bought in, with a net inflow of 23 billion yuan this week, adding positions for seven consecutive days. Specifically, on Friday, the net inflow of capital from the North was 7.45 billion yuan, including 3.278 billion yuan from Shanghai Stock connect and 4.172 billion yuan from Shenzhen Stock connect.
Li Lifeng, Wei Xue and AI Xiongfeng, analysts of Guojin securities, said in the research report that with the continuous promotion of opening up and the further inclusion of a shares in various international indexes, foreign capital inflow will be the general trend and will become an important force to support the bottom of the market.
With the further opening of the A-share market and the inclusion of A-share in MSCI and other events, foreign investment has accelerated to flow into A-share in the past two years. In 2017 and 2018, the net inflow of land stock connect was RMB 1997 billion and RMB 294.2 billion respectively; as of October 30, the net inflow of land stock connect this year was RMB 210.9 billion, and the accumulated net inflow of foreign investment through land stock connect channels was about RMB 852.7 billion.
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According to wind data, up to now, the number of a shares held by Beishang capital is 2007, with a market value of 1.22 trillion, a record high, an increase of 60.87 billion yuan or 5.25% compared with the end of the third quarter. Among them, the stock market value of Shanghai stock market exceeds 700 billion yuan, reaching 739.895 billion yuan, the stock market value of Shenzhen stock market main board reaches 250.386 billion yuan, and the stock market value of small and medium-sized board and growth enterprise board respectively rises to 153.114 billion yuan and 77.769 billion yuan.
In the configuration of wind secondary industry, the food and beverage industry still occupies the first place in the capital allocation in the north. The top four industries with the highest market value of Beishang capital are food and beverage, durable consumer goods and clothing, banking and pharmaceutical biology, all with market value of more than 100 billion yuan.
From the perspective of the change in the proportion of positions, compared with last weekend, the three major industries, durable consumer goods and clothing, food and beverage and tobacco, pharmaceutical biotechnology and life science, have significantly increased their positions, with the increased proportion of 0.45%, 0.34% and 0.22% respectively; at the same time, this week, the banking, real estate, capital goods, technical hardware and equipment and transportation industries have been reduced their positions, with the reduced proportion exceeding 0.1%.
Specific stocks, this week a total of 671 stocks during the northern capital increase. Among them, 8 shares increased by more than 2% including DASHENLIN, Haixing power, Weill, Xusheng, Sofia, Suntech, vantage and state inspection group, and another 35 shares increased by more than 1%.
In terms of reducing holdings, 610 stocks suffered capital reduction in the north this week. Among them, the proportion of home furnishing holdings decreased by 14.17 percentage points; Yuetai shares, Yutong Bus and Quanzhi technology all reduced their holdings by more than 2%; in addition, 22 shares, such as Bank of Hangzhou, aonong biology, AVIC Shenfei and HUAFA, reduced their holdings by more than 1%.
According to the analysis of GF Securities, the total foreign investment mainly includes northbound capital and QFII / rqfii. Up to 19q3, about 2 / 3 of the total foreign-funded shares were held in North China, and about 1 / 3 of them were held in QFII / rqfii.
According to the Research Report of Guangfa Securities, according to the data of the central bank, at the end of the third quarter of this year, the total foreign shareholding scale was 1.77 trillion yuan, of which 66% was from Beishang capital, 34% was QFII / rqfii, and the proportion of Beishang capital in the channels of foreign investment in A-shares was further expanded.
According to Guosheng Securities Research Report, northbound capital has reshaped the structure of A-share investors, and the voice power of foreign investors has been continuously improved.
In November, MSCI implemented the third step of A-share expansion, and foreign incremental capital will flow into the A-share market, which will boost market sentiment in the short term.
From the perspective of industry, it is expected that in November, the incremental inflow of foreign capital into medicine, banking, food and beverage, non banking, electronics and other industries will be large-scale, and the above sectors deserve attention. In the medium and long term, A-share will gradually internationalize, foreign capital will flow into the general trend, and foreign capitals voice will gradually improve, which will help to support the bottom of the market, and at the same time, the impact on the market will further increase.
In addition to bringing incremental capital, improving the structure of A-share investors and boosting market sentiment, northbound capital also promoted the market governance of A-share from the side.
Foreign capital will continue to flow into A-share
At present, the three major international indexes are actively expanding the capacity of a shares.
On November 8, MSCI will release the list of additions and deletions to the index for the half year of November 2019. The adjustment of specific index investment varieties will be implemented on November 26 and take effect on November 27. In theory, this expansion may bring us $19.5 billion in active incremental capital, equivalent to 137.239 billion yuan.
According to Guojin Securities Research Report, a shares were included in MSCI special report. In November, due to the inclusion of mid market shares, the scale of passive incremental capital brought by this time will be the highest in all previous times, which is expected to be 49.3 billion yuan. The passive incremental capital of large and mid market shares will be 28.1 billion yuan and 21.2 billion yuan respectively, higher than the last four times.
In November, 175 mid cap stocks will be included for the first time, with a mid cap equity of 15.41%, mainly concentrated in pharmaceutical, electronic, computer and other industries.
MSCI official said that since A-share was gradually incorporated into MSCIs three main indexes, namely MSCI Emerging Market Index, MSCI country index and MSCI China Index, the number of new stock accounts trading A-share increased by 5600, which promoted the capital allocation of northbound to about $84 billion in A-share portfolio.
On October 10, MSCI announced that from November 2019, the qualified Sci-tech Innovation Board securities will be included in the MSCI global investment market index (Gimi).
According to the plan of FTSE Russell plan to publish in September 2018, a share will be included in the FTSE Russell index for the first time with 5% Inclusion factor in June 2019; in September 2019, the inclusion factor of a share will rise from 5% to 15%; in March 2020, the inclusion factor of a share will rise from 15% to 25%.
After the completion of the first phase, the weight of a shares in the FTSE Russell global stock index and emerging market index will be increased to 0.57% and 5.57% respectively. According to the official data of FTSE Russell, the fund to track the FTSE Russell global stock index system is about $1.7 trillion, the scale of passive linked tracking index fund accounts for about 80% - 85%, and the scale of active reference tracking index fund accounts for 15% - 20%.
As early as 2013, the S & P Dow Jones index began to consult market participants on the inclusion of a shares. In December 2018, the S & P Dow Jones index published the results on the classification of Chinas stock market and announced the inclusion of a shares in the relevant international indexes. On September 23, 2019, the S & P Dow Jones index was officially incorporated into A-share.
Guosheng Securities Research Report shows that foreign investment is still in the primary stage. In terms of space, at present, the proportion of foreign investment in the domestic market is only about 3%, which is far lower than the general proportion of more than 15% in markets such as Japan and South Korea. A shares are still in a large proportion in the global market, and the proportion of domestic foreign investment will continue to rise. At the end of November, MSCIs third expansion in the year will attract about 200 billion yuan of incremental capital, and the long-term trend of foreign capitals allocation of a shares is hard to change.
Organization: warm market in November
Guosheng securities analysts Zhang Qiyao and Zhang junxiaoyan reported that why the home appliance industry has become the first choice for foreign investors to increase their positions in the near future?
Valuation cost performance + completion boom improvement, home appliances become the first choice for foreign investment in the current stage. As of October 31, the PE level and Pb level of the household appliance industry were about 16 times and 3.1 times respectively. With the improvement of the real estate completion industry, the roe level and performance growth rate of the household appliance industry have maintained a significant advantage, and the cost performance ratio of the valuation has gradually become prominent. Compared with food, beverage and medical biology, the valuation advantage of home appliance industry is prominent, and it is still expected to obtain a substantial increase in the future.
Zhang Yulong, an analyst with CSCI, said MSCIs inclusion in a shares was the reason for the rise, but not the main reason.
Before the Spring Festival in January 2020, CPI high-level operation is the main line of the market, and the downward process of interest rate is still in the process of interruption. To maintain the upward judgment of market shock, the direction of undervalued value and excellent performance is still the main direction in the short term, but it is suggested to transfer from banks to industries with higher cost performance, such as home appliances, construction, real estate, etc. The long-term line is still a two wheel drive of technology + consumption. Under the background of financial supply side reform, the allocation value of securities companies, especially the leading ones, has always been emphasized.
Anxin securities is cautiously optimistic about the future market, and believes that the market risk preference will still tend to decline in November, and the demand for profit is strong. We are still optimistic about the transition trend of the new and old driving forces of the medium and long-term economy and the liquidity status. The medium and long-term trend of the A-share market has not been reversed, but it is also reasonable to usher in a certain period of shock adjustment. We think that in this stage, we need to control the position, wait for the opportunity, and take into account the characteristics of the downward risk preference. In addition to the high boom, we need to pay more attention to the underpricing plate tactically.
Huatai Securities pointed out that from the perspective of equity, the adjustment space of RMB policy brought by the Feds interest rate cut will increase, and there will be a window of foreign capital inflow in the fourth quarter. In addition, corporate profits will also improve year-on-year, which should not be considered as bad overall. Its good to have no bad in the fourth quarter. But even if the rise space will not be very large, it is relatively consistent that the fourth quarter is still an oscillating market. In terms of industry, in addition to TMT, innovative medicine and other industries, the attention of banking, infrastructure, home appliances, cosmetics and other industries has increased significantly.
According to Fei Xiaoping and Chen Xiyang, analysts of Dongguan securities, on the whole, the external environment is stable, the performance of listed companies is growing steadily, and the domestic expectation for stable growth is increasing, while the capital market will also usher in medium and long-term capital inflow, which will make the overall capital of the market remain active. After the shock consolidation in September and October, the technology has some enterprises Stable, with the recovery of market confidence, it is expected to usher in a stable rebound trend in November. The core fluctuation range is 2900-3100.
(this paper is comprehensive from MSCI and other company announcements, research reports of securities companies, etc.)