Institutional investors with a market value of 2.5 trillion held by public offering have more say

category:Finance
 Institutional investors with a market value of 2.5 trillion held by public offering have more say


Market value of public offering shares: 2.5 trillion

The trend of A-share institutionalization is obvious

According to wind data, the market value of institutional investors in 2019 reached 30.5 trillion yuan, an increase of 31.2% over 2018. Among them, the market value of public funds is 2.4 trillion yuan, an increase of 64% over 2018; social security funds and insurance institutions are 378.2 billion yuan and 1.5 trillion yuan, an increase of 95% and 54% over the same period of last year. From the end of 2017 to the first quarter of 2020, the proportion of shares held by public funds in the market value of A-share circulation rose from 3.89% to 5.58%, reaching the highest level since 2014.

In view of the development trend of A-share institutionalization, Chen Wenyu, deputy general manager of Jingshun Great Wall Fund, believes that institutionalization is the only way for the capital market to become effective, and the overseas mature market has experienced a similar process. The function of capital market is to allocate capital reasonably and efficiently, meet the investment objectives of various funds in different periods through the specific investment of professional investors of various asset classes, and finally reflect the reasonable and efficient function of capital market.

A senior analyst of Shanghai Securities said that with the increase of institutional shareholding ratio, the pricing of a shares will become more and more effective, and more funds will flow to high-quality stocks, which will promote the optimal allocation of resources in the market as a whole.

According to China Merchants Fund, capital is the most important direct investment element in the capital market. Only in the hands of professionals can capital be used optimally and efficiently. Institutional investors, especially public funds, can promote the survival of the fittest in the capital market, which is very important to establish a healthy and excellent capital ecology.

Pu Yan, managing director of vanguard and head of Chinas investment management department, said that from the perspective of reducing market volatility, a higher proportion of institutional investors strictly abide by the investment discipline based on objectives, risk control and long-term investment, which helps to improve investor behavior and maintain the stability of the capital market; on the other hand, when institutional investors such as pension, insurance companies and public offering invest With a long span, we can study market risk and return from a longer perspective. In the extreme market, they are often reverse investors and become an important force to stabilize the market.

Wei Fengchun, chief macro strategy analyst of Boshi fund, believes that A-share institutionalization is an inevitable trend. Institutionalization can not only effectively weaken the investment risk of individual investors, but also play an important role in preventing and resolving the overall financial risk of the country. At the same time of Chinas opening up, it is difficult for the retail market to cope with the external impact, and the institutionalization can reduce the market volatility to a certain extent.

In terms of leading role of market value, Su Changjing, head of quantitative investment department of Hongde fund, analyzed the trend of specialization and institutionalization of market participants and the popularization of value investment concept, which is conducive to improving the valuation of competitive companies and reducing the cost of equity financing of excellent companies.

Lin Qingyuan, manager of the three power fund of financing transformation, said that the increase of institutional shareholding ratio plays a positive role in stabilizing the market and improving the ability of mining market value. Taking emerging industries such as semiconductors and innovative drugs for example, he analyzed that the threshold for retail investors to participate in these industries is relatively high. Institutions will do more in-depth research and comparison on companies in emerging industries, and will guide funds to concentrate on excellent leading companies, so as to achieve the optimal allocation of market resources.

Suggestions of asset management organization

Improve A-share institutionalization

In recent years, with the influx of foreign capital and the investment of ordinary investors through professional institutions, the institutionalization trend of A-share market is more and more obvious. However, a number of asset managers said in an interview that compared with the degree of institutionalization in overseas mature markets, the proportion of institutional investors in A-share market still has much room for improvement.

South Fund said that observing the developed capital markets such as the United States, Japan and the United Kingdom, it can be found that individual investors hold less than 10% of the market value, while the proportion of individual investors in the United Kingdom market is even less than 3%, and the mature capital market is more institutional.

According to the data of Tianfeng Securities Research Institute, as of the end of the first quarter of 2020, institutional shareholding accounts for 15.99% Of which, the proportion of financial institutions is 15.04% There is still a big gap compared with the institutionalization level of mature markets.

In order to improve the level of Chinas capital market institutionalization, advocate long-term investment and value investment, a number of industry people have made positive suggestions to seek the optimal solution to continue to improve the proportion of institutional shareholding.

Wei Fengchun believes that the core driving force of the institutionalization process of American stock market is the entry of pension into the market. The allocation of mutual funds for pension not only improves the level of institutionalization and specialization of the stock market, but also indirectly promotes the development of mutual funds, especially the prosperity of instrumental allocation funds. Drawing on the experience of American stock market, China should also vigorously develop and enrich asset allocation public funds and public funds that meet the needs of the elderly, incorporate them into the elderly care system, and further guide the A-share market investment concept to be rational and mature.

South Fund said that to maintain the attractiveness of institutional funds to individual investors, it is necessary to make institutional investment income represented by public offering continue to outperform individual investors and constantly improve their investment and research capabilities through the construction of its own investment and research team, investment and research cooperation and exchange, and focus on advantageous fields. On the other hand, international long-term institutional funds prefer value investment and continue to invest Expanding the opening level of Chinas financial market and attracting more institutional capital from mature capital market will also help to improve the institutionalization level of a shares.

According to Nord fund, institutional investors should further become market players in value discovery and strengthen their market-oriented resource allocation role. As for the Listing Rules of A-share market, we should improve the supply of listing targets, steadily promote the reform of registration system, and strictly supervise the information disclosure of listed companies. At the same time, further improve the long-term and innovative nature of institutional investors in product creation, and enhance their attention to the long-term return stability of investment. According to the above senior analysts of Shanghai Securities, the mechanisms used in mature markets such as registration system, t + 0 and no increase or decrease require higher ability for investors to identify the advantages and disadvantages of enterprises, which is one of the reasons for the high proportion of overseas institutions. It is suggested by China Merchants Fund that, in order to increase the proportion of medium and long-term institutional investors, first, it is necessary to vigorously guide insurance, pension and other funds into the market; second, it is necessary to continue to crack down on market manipulation and insider trading, and strictly check the abnormal fluctuation of stocks; third, it is necessary to formulate effective incentive and assessment mechanisms, and strengthen the assessment of long-term yield and volatility; fourth, it is necessary to emphasize the implementation of market-oriented assessment, and pay attention to the cultivation and establishment of promotion The corporate culture and industry culture of advocating long-term investment and value investment. Source: responsible editor of Securities Times: Ren Hui ufe63 nbj9607

According to Nord fund, institutional investors should further become market players in value discovery and strengthen their market-oriented resource allocation role. As for the Listing Rules of A-share market, we should improve the supply of listing targets, steadily promote the reform of registration system, and strictly supervise the information disclosure of listed companies. At the same time, further improve the long-term and innovative nature of institutional investors in product creation, and enhance their attention to the long-term return stability of investment.

It is suggested by China Merchants Fund that, in order to increase the proportion of medium and long-term institutional investors, first, it is necessary to vigorously guide insurance, pension and other funds into the market; second, it is necessary to continue to crack down on market manipulation and insider trading, and strictly check the abnormal fluctuation of stocks; third, it is necessary to formulate effective incentive and assessment mechanisms, and strengthen the assessment of long-term yield and volatility; fourth, it is necessary to emphasize the implementation of market-oriented assessment, and pay attention to the cultivation and establishment of promotion The corporate culture and industry culture of advocating long-term investment and value investment.