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Original Title: US Small Cap Stocks Rising Out Of Institutional Stocks By A Wide Margin! The A-share small-cap index continues to decline. Should the styles of the Chinese and US stock markets be swapped? SPAC’s frenzy intensified and the US stock market has triggered a wave of quotes
Sino-US stock market style swap?
The A shares are mostly retail investors. Previously, they preferred small-cap companies. With increasing funds, gradual control over the price of A shares has formed a vigorous market for institutional stocks. The US A-share trend is becoming increasingly obvious as funds flooded into institutional funds.
However, after the outbreak of the new corona epidemic, US stocks have become more and more like A shares before.The trend of US stock market institutions underperformed small-cap stocks by a wide margin, and even the stocks of retail investor holding groups have left institutions defenseless.
Institutional stocks: A stocks rose sharply, while US stocks were unchanged
Entering 2021, the global stock market ushered in a good start. According to important data from the global stock market,The Hang Seng Index, the Shenzhen Component Index and the Nasdaq Index rose the most during the year, increasing by 10.8%, 10.3% and 9.37% respectively.The overall performance of A shares on global stock markets is high, and the performance of institutional A shares is particularly outstanding.
According to Securities Times Databao statistics, the performance of the fund group’s top 30 stocks at the end of 2020, 30 stocks rose an average of 22.68%, of whichSungrow、Wanhua Chemical、Tongwei Stock、Free china、Sany Heavy IndustrywithKweichow moutaiThe other 11 stocks were up more than 30%; Sungrow ranked first, with a cumulative increase of 64.76% this year, justHengrui Medicine、Gree Electric、Luxshare AccuracywithPing An from ChinaThe share price has dropped.The performance of the price of Baotuan institutional shares far exceeds the A-share market index.
For the US stock market, the data hoard statistics show thatInstitutional stocks of the top 30 stocks rose an average of 3.43% for the year, outperforming only the Dow Jones Industrial Index by 2.78%, and not as well as the 4.76% of the S&P 500 and the 9 37% of the Nasdaq.Among the 30 stocks, only Intel, Exxon Mobil, Google, Abbott Pharmaceuticals, JP Morgan Chase and Microsoft have seen a cumulative increase of more than 10% for the year, and Intel’s cumulative increase of 24.82%, the largest increase .
The data trove compares the stocks of the A-share institution pool to those of the U.S. stocks and found thatCompanies on the US stock list are more stable, with most of them leading the market capitalization. Companies on the A-share list see more changes in each quarter of disclosure, and institutional A-share shares have better growth.
Small Cap Stocks: US Stocks Performed Dazzling, A Shares Floated Lower
US institutional stocks performed poorly, while small-cap stocks performed very well. The Russell 2000 index represents the market value of small and medium stocks on the market. The total market value of 2,000 companies is only $ 3.5 trillion, which is less than the total market value of Apple and Microsoft (a total of $ 4.12 trillion).The Russell 2000 Index performed exceptionally dazzling after the year, with a cumulative increase of 15.93%, which is close to the 18.36% gain for the full year of last year, and has significantly outperformed the major US stock indices. .
Among Russell 2000’s constituent shares, 49 shares have doubled since the beginning of the year. Although some companies with excellent share price performance are considered to have excellent growth, the overall uncertainty is very great. Most companies with small, unprofitable market capitalizations are not profitable. Regarding the mobile price-earnings ratioOnly Weice Investment, CLEAN ENERGY FUELS, SILVERGATE CAPITAL, Safety Container and Lascom Pharmaceutical are positive, and the others are losses.Novavax Pharmaceuticals and EXP WORLD are the only two companies with a market value of more than US $ 10 billion.
A very small number of A-share stocks rose in a group, causing the index to rise sharply, while for most A-share companies, the decline accelerated.CSI 1000 IndexComprised of 1,000 small-scale, well-liquid stocks, the average market value and the mid-market value of its constituent stocks are smaller than those of the Small and Medium-sized Business Index and the ChiNext Index, which can comprehensively reflect the general situation of small-cap companies. companies on the Shanghai and Shenzhen stock exchanges.Data shows that China’s equity index has continued to fluctuate and decline since August last year, and will accelerate its decline in 2021, with a cumulative decline of 5.16% over the year, underperforming significantly below the market index. usually.Accounting for illiquid A-share shares will only perform worse.
SPAC’s frenzy intensified,Become an investor
In the US stock market, the SPAC frenzy has intensified: On February 12 alone, there were 28 application documents, a record.In less than a month and a half, SPAC’s fundraising scale in 2021 surpassed half of last year’s all-time peak.
SPAC, the Blank Check Company, also known as a Special Purpose Acquisition Company, is a “shell company” made up of mutual funds and other fund-raising entities and listed on the United States Stock Exchange. This “shell company” “Cash only, the main task after listing is to find an unlisted company with high growth prospects to merge with, so that it can obtain financing and go public. Since SPAC was already a company Listed before the merger, the new company does not need to undertake other cumbersome IPOs. The process is relatively convenient and can be converted directly to a public company.
Simply put, SPAC is different from the traditional “IPO listing” and “back door listing”.By building projectiles, raising funds, and then conducting mergers and acquisitions, the target of mergers and acquisitions will eventually become listed companies.
According to public data from data firm SPAC Research, on February 12, more than 20 investor groups submitted 28 reports of company requests for blank checks to the U.S. Securities and Exchange Commission.Since 2021, there have been 144 SPACs in the US stock market, with a fundraising scale of $ 45.7 billion, an increase of more than 50% from the all-time high of $ 82 thousand. million in 2020.
The rise in SPACs of US stocks has provided a shortcut for other companies to go public. This model is increasingly favored by investors, and is also related to some extent to the concept of speculation by retail investors. This method has also brought wealth to income investors.Galactic Virgin, Spotify, PalantirAnd other leading companies have adopted the SPAC method to go public,Jia Yueting’s (Faraday Future) FF car is also rumored to be listed in the SPAC.
The liquidity of the US market is the main reason
The difference in the price behavior of US stock exchanges and small-cap stocks, the emergence of retail investors with holding groups and short-selling investors and the intensification of the SPAC frenzy, on the other hand, it illustrates the concept of enthusiastic retail. and speculation in the secondary market for US stocks.In fact, the Fed’s lax monetary policy has generated sufficient liquidity in the market, which provides an objective basis for the popularity of these phenomena.
At the Fed’s interest rate meeting in late January, the Fed stated that monetary policy will be relatively stable, ultra-low interest rates will remain unchanged, the scale of quantitative easing will be relatively stable, and fiscal policy will be more active. The new Secretary of the Treasury, Yellen, will promote the advancement of fiscal policy,Don’t rule out a fiscal stimulus of more than 2 trillion yuan.
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