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Northbound funds flow out over 10 billion yuan in a single day. Institution: After digesting the market, the market is expected to rise again.

May 15, 2019 06:12
Author: Lin Ronghua Li Huimin
source: China Securities Journal
edit:Eastern Fortune Network

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[Northbound capital outflows over 10 billion yuan in a single day: After digesting the bearish market, the market is expected to rise again] Institutional sources believe that although the northward capital inflows will be repeated in the short term, the current liquidity is very good, and the temporary withdrawal of northward funds will not make A The stocks are under pressure and risk appetite will not reproduce the 2018 scenario. At present, the market has fully reflected all the negatives, and the overall valuation has returned to a low position. After the precipitation and digestion, it is expected to regain the upward trend. (China Securities Journal)

On May 14, the data showed that the net outflow of funds from the mainland to the mainland was 10.9 billion yuan. This is the second time that the net outflow of northbound funds has exceeded 10 billion yuan since the beginning of this year. It is also the second largest single-day net outflow of northbound funds since the opening of the shares. In this regard, institutional sources believe that although the northward capital inflows will be repeated in the short term, the current liquidity is very good. The temporary withdrawal of the northward funds will not put pressure on the A shares, and the risk appetite will not reproduce the 2018 scenario. At present, the market has fully reflected all the negatives, and the overall valuation has returned to a low position. After the precipitation and digestion, it is expected to regain the upward trend.

Uncertainty becomes the main pusher

The data shows that on May 14, the net outflow of Luxintong North to the funds was 10.90 billion yuan, of which the net outflow of Shanghai Stock Connect was 7.162 billion yuan, and the net outflow of Shenzhen Stock Connect was 3.737 billion yuan. In fact, the outflow of funds from the north has long been a clue. As early as March 25 this year, the net outflow of funds from the north to the day was 10.774 billion yuan; since April, the net outflow of funds to the north has reached 46.306 billion yuan; as of May 14, May. Since the five trading days, the cumulative net outflow has reached 28.309 billion yuan. Among them, on May 14th, the outflow situation was maintained throughout the day, with few repetitions.

A foreign-invested institution said that on the one hand, real estate stocks generally fell, causing some disturbance to the northward capital outflow. On the other hand, the recent shocks in the A-share index have also led to the outflow of funds from the north.

"External uncertainty is also a major factor in emotional and economic pressure." Another institutional source said that in addition, the recent fluctuations in US stocks have also affected the US stock market crash on May 14th. However, he said that market sentiment has gone from pessimistic to discussion. After several stages, the level of investor awareness has improved significantly, and new investment opportunities are constantly being sought. At the same time, the further implementation of fiscal policies such as domestic monetary policy, tax reduction and fee reduction is conducive to stabilizing economic growth.

Northbound capital outflow has limited impact

At the beginning of this year, the northward capital inflow was significantly accelerated compared with last year, which boosted the A-share rally. When talking about the short-term "stall" of the "market engine", will it further cause the funds to flee, Wang Qiang, a large-scale public fund strategist in Shanghai, said that the current domestic liquidity is very good, and the outflow of funds from the north will not have much impact. In fact, liquidity was tight in 2018, and although the northward funds continued to flow in, they failed to change the downward trend of A shares.

Du Bin, chief economist of Hongyi Yuanfang Fund, believes that the market is expected to fluctuate in the near future. However, MSCI will adjust the A-share factor, which will also bring in the inflow of new funds. Therefore, it is expected that the northward funds will be in fluctuations. status. Judging from the performance of the Northward funds in the past period of time, the performance of the stock holdings of its concentrated holdings is better than that of the broader market, reflecting the ability to select stocks of Northbound funds. At the same time, in terms of timing ability, it has also been reflected in the past few months. More obvious.

The China Life Insurance Fund pointed out that since 2019, the overall performance of the capital market has been better, and the risk appetite has continued to rise, which is partly related to the easing of external negatives. However, considering that the rapid decline of the capital market in 2018 is due to large domestic and international uncertainties, including the uncertainty of economic fundamentals, and the continuous adjustment of domestic policies and the continued development of opening up since the second half of 2018, With the continued deepening of internal reform measures, market risk appetite will not reproduce the 2018 scenario.

Hannah Anderson, global market strategist at Morgan Asset Management, also said that downside risks will continue until the external negative factors are eliminated, but the market may rebound after landing and allow investors to return to other factors that focus on other drivers' returns.

Focus on defensive varieties

After the gap opened lower on May 6th, the market maintained a volatile trend, the volume could shrink, and the wait-and-see mood was strong. Institutions generally believe that after the market has precipitated and digested various negative interests, it is expected to regain the upward trend and focus on defensive varieties.

Xu Wenbo, director of equity investment at Orient Fund, said that as domestic liquidity and earnings turned better than expected, the probability of market volatility adjustments increased, and it is expected that further adjustments will be made. Equity assets will be under pressure. On the whole, the low-value blue-chips with strong performance certainty, good profit recovery, and high self-owned competitive advantages have higher value, while low-estimation blue-chips with low expectations and rapid rebound in the current round are also worthy of attention. .

A brokerage official said that the valuation of the A-share market in the recent correction has already retreated from the beginning of the year to half of the expansion in mid-April. The valuation of some A-share leading stocks in the foreign-owned shares has once again fallen back to the historical average. Mid- to long-term appeal will again show up. On the whole, it will not reverse the general trend of China's consumption upgrade and industrial upgrading.

Du Bin said that from the perspective of valuation, the current domestic market valuation is still attractive, and the medium and long-term is still a market worth investing and configuring. In the short-term, the market may also be affected by external factors. The medium and long-term is affected by factors such as fundamentals, economic restructuring and the promotion of reform and opening up. These aspects are still on the track of advancement, and these factors are positive. It is the most worthwhile investment in the A-share market.

(Article source: China Securities Journal)

                                (Editor: DF380)


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