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Original title: North’s net capital inflow during the year exceeded 140 billion yuan. Experts predict that foreign capital will continue to buy in the next 5 years.
Our reporter Wu Xiaolu
Since the beginning of this year, despite the turmoil of the epidemic, enthusiasm for foreign investment in A shares has not waned. According to data from Oriental Fortune Choice, a reporter for the Securities Daily found that, as of November 26, the net inflow of funds from North China was 144.278 million yuan during the year, of which the net inflow from Shanghai Stock Connect was 44,531 million and Shenzhen Stock Connect’s was 99,747 million.
The return of capital from the north in November is obvious
In terms of time, the net inflow of Beijing funds this year was concentrated from April to July, and the Beijing funds were net purchases for 4 consecutive months. Among them, the net inflow of funds from the north in April and June exceeded 50 billion yuan, which were the two months when the net inflow was relatively high during the year.
Wang Delun, chief strategy analyst at Industrial Securities, told the Securities Daily reporter that the continued net purchase of funds from April to July was mainly due to the new corona pneumonia epidemic being basically under control, the resumption of work and production proceeded in an orderly fashion, and the economy was the first to rebound and recover. In addition, the financial sector canceled the quota restrictions of QFII / RQFII, expanded the scope of investment of QFII / RQFII, and the Hong Kong Stock Exchange launched the centralized management services SPSA (the Shanghai-Shenzhen Trade Optimization Measures -Hong Kong Stock Connect heading north), etc., which shows the determination of China’s financial market to open to the favored by global investors.
The reporter warned that since this year, to November 26, the net inflow of capital from the north in some trading days exceeded 10 billion yuan, which may be directly related to the opening of the capital market and the implementation of reform policies. On June 19, the net inflow of funds from the north was 18,233 million yuan. On that day, the FTSE Russell index increased the inclusion factor of A-shares from 17.5% to 25%. On October 9, the “Opinions of the State Council on the Further Improvement of the Quality of Listed Companies” were published. On October 9 and 12, Beijing Capital’s net purchase exceeded 10 billion yuan for two consecutive business days, 11.267 million yuan and 135.1 billion yuan respectively. 100 million yuan.
In November, the return of capital from the north was evident. According to data from Eastern Wealth Choice, as of November 26, since November, the cumulative net inflow of funds from the north has reached 50.513 million yuan, exceeded only by April and June. Among them, on November 9, the northern funds set a new record for single-day net purchases for the year, with a net purchase of 19.699 billion yuan.
In this regard, Wang Delun said that as of November, due to factors such as the gradual clarity of the situation of the general elections in the United States and the considerable progress in the development of the new crown vaccine against pneumonia, the appetite of risk from foreign investment has recovered. “Overall, there were two main reasons for the continued net inflow of funds from the north during the year. This year, China’s economy took the lead in the world to recover, and the economy is basically good-oriented; dividends of opening the financial sector to the outside world continue to accelerate and improve efficiency. “
Zhang Qiyao, chief strategy analyst at Guosheng Securities, believes that since June this year, the US dollar has continued to weaken and the renminbi has entered an appreciation channel, which in turn boosted the attractiveness of renminbi and renminbi assets. further promoted the increase in the allocation of A shares by Beijing funds.
Foreign capital will continue to flow in the next 5 years
From the perspective of the route, this year, the northern capital has accelerated the influx of the technology sector. According to data from Oriental Fortune Choice, a Securities Daily reporter shows that as of November 26, to November 26, the number of net purchases of electronics industry shares by foreign investors was the highest, with more than 1,400 million shares, followed by chemicals and steel. Net purchases exceeded 1.3 billion shares.
“In the future, core assets will continue to grow independently. Since this year, foreign capital has embraced core assets in a broader sense.” Wang Delun said that the capital flow from the north this year has three characteristics. First, Shenzhen Stock Connect far surpasses Shanghai Stock Connect. The cumulative net inflow of funds northbound from Shenzhen Stock Connect is approximately 100 billion yuan, while the net inflow of Shanghai Stock Connect is only over 40 billion yuan. Second, the small and medium innovation sector has performed well. In the last three years, the net inflow of funds from the main board to the north far exceeds that of small and medium-sized companies. The board and the growth market have shown a “three-part world” pattern this year; third, traditional foreign-funded consumer and financial sectors have performed weakly this year. The top-ranking sectors for net capital inflows from the North are industry, information technology, and materials.
“This shows that foreign capital is not only buying blue chips and consuming white horses, but the core assets and top leaders of various industries, especially the emerging growth represented by ChiNext, will become one of the key directions for capital to overseas continue to be deployed in the future, “explained Wang Delun.
From the market value perspective of Beijing Capital Holdings, the three food and beverage, medical biology and home appliance industries have the highest market value. Zhang Qiyao told the Securities Daily reporter that from the perspective of the allocation of funds in the industry to the north, consumption is still in a heavy position and core assets with stable earnings returns are still favored; From the perspective of position changes, the funds in the north direction will have some impact on the technology and cycle sectors this year. Increase the position and lighten the position in the financial sector.
Regarding the future flow of funds to the north, Wang Delun believes that “At present, the best assets in the world are in the Chinese stock market. I am optimistic about the continued influx of trillions of foreign capital in the next five years. In the medium term, China’s high-quality equity assets are more profitable: China’s economic recovery is clearer, valuations have advantages, and capital market reforms and innovations will help increase foreign capital’s attention to Chinese assets “.
“In the long term, first, the correlation coefficient between A-shares and the US stock market is low, reflecting the advantages of multi-market allocation; second, a weaker US dollar is good for emerging markets and China will benefit more; third, A-share volatility has decreased and has more allocation value; finally, foreign holdings currently account for only 5% of the market value of A-shares A shares, compared to 15% in the United States and 30% in Japan and South Korea. The proportion of foreign shares in A shares still has room to double, “said Wang Delun.
