Potential influx of more than $ 500 billion drives A-shares from retail to institutional markets
The economic reference newspaper has a potential inflow of more than 5,000 trillion U.S. dollars. A-shares have shifted from “retail markets” to “institutional markets.” More than 5,000 trillion U.S. dollars can increase inflows, and the market value of positions has reached 1.
The 68 trillion yuan foreign inflow accelerated, driving A-shares from a “retail market” to an “institutional city” and the continuous introduction of Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, and Shanghai-London Stock Connect.Shi Russell and other important 四川耍耍网 international indexes, the degree of openness and internationalization of China’s capital market have continued to increase.
In fact, global capital is also constantly increasing the allocation of the A-share market, gradually becoming an important participating force in the A-share market, and its investment style is also affecting the A-share market.
From the perspective of investor structure and market style, institutional investors are playing an increasingly important role in the stock market, and market transactions have gradually matured.
Capital market continues to intensify two-way opening On June 25, the Shanghai Stock Exchange and the Japan Exchange Group respectively opened the opening ceremony of antique China-Japan ETFs. Four China-Japan ETF interoperable products were successfully listed on the Shanghai 厦门夜网 Stock Exchange.A new breakthrough in increasing two-way opening.
On June 21, the launch of the A-share split FTSE Russell Global Index was antiqued on the Shenzhen Stock Exchange. FTSE Russell announced that it would become an A-share replacement for its global stock index system.
According to the plan, the A-share “into the rich” is divided into three steps.
June 21 this year is the starting point. A shares will realize the first swap of their index system, divided by 20%, divided by 40% in September 2019, and divided by 40% in March 2020, covering large, medium and small.stock.
From the point of view of the starting point, to the end of the first phase of replenishment in March next year, Chinese A shares accounted for 5 in the FTSE Russell Emerging Market Index.
5%, accounting for 0% of the FTSE Russell Global Market Index.
On June 17, the China Securities Regulatory Commission and the Financial Conduct Authority issued the Shanghai-London Stock Exchange Joint Announcement, which approved in principle the Shanghai Stock Exchange and the London Stock Exchange to conduct interconnected depositary receipt business (hereinafter referred to as the Shanghai-London Stock Connect);The “Memorandum of Understanding on Supervision and Cooperation of the Shanghai-London Market Interconnection Mechanism” was officially launched, and the Shanghai-London Stock Exchange will officially launch its cooperation on cross-border securities regulatory enforcement.
The “Joint Announcement” clearly states that in the initial stage, scale management of cross-border funds of Shanghai-London Stock Connect was implemented; of which, the total volume of eastbound business was 250 billion yuan and the scale of westbound business was 300 billion yuan.
On May 14, MSCI (Ming Sheng Company) announced that it would increase the Chinese market A-share segmentation factor from 5% to 10%.
Simply put, dividing 26 Chinese A shares by the MSCI China Index included the total number of shares to 264.
Of the newly divided 26 stocks, 18 are GEM stocks.
After two times, Chinese A shares accounted for 5 in the MSCI China Index and the MSCI Emerging Markets Index respectively.
25% and 1.
In addition, according to the gradually announced schedule, in August and November this year, MSCI carried out two weight enhancements, eventually raising all China’s large-cap A-share replacement factors to 20%, and at the same time raising China’s mid-cap A-shares (including eligible conditions)GEM stocks) divided by the 20% exclusion factor by the MSCI index.
Statistics show that since 2019, the Shanghai Stock Connect and Shenzhen Stock Connect under the interconnection mechanism have entered the fast-moving A-share market.
As of June 25 this year, the Shanghai Stock Connect had a total net inflow of funds 531.
There was 5.6 billion yuan in net inflows from Shenzhen Stock Exchange to 438.
8.7 billion, a total of 970.
4.2 billion yuan.
Calculated since the opening, the net inflow of funds from the Shanghai Stock Connect and the Shenzhen Stock Connect has reached 4298 respectively.
3.3 billion and 3089.
4.3 billion yuan.
In terms of QFII and RQFII, as of now, there are 319, 255 foreign institutions have obtained QFII, RQFII qualifications, and QFII and RQFII investment quotas have reached 1057 respectively.
$ 9.6 billion, 6773.
RMB 2.2 billion.
The relevant person in charge of the Securities and Futures Commission said that the Securities and Futures Commission is in the process of revising.
Convenient and controllable qualified foreign institutional investor system.
During the year, the implementation of the incremental funding of the A-share market will reach 500 billion U.S. dollars, and the implementation of the interconnection mechanism will be divided into important international indexes. The most direct and direct impact on the A-share market is the large amount of “living water”-incremental fundsInflux.
Guojin Securities pointed out that the incremental funds brought by MSCI in 2019 were about 455 billion yuan, which was 3 in 2018.
84 times, the active funding is tight and the layout is early.
According to estimates, in accordance with the A share divided by ratio increase plan, in terms of Renminbi, the proportion of A-share large-cap stocks may be increased to 10% in May, and the GEM large-cap stocks will be replaced at the same time, with incremental funds of approximately 1281 trillion;To 15%, the incremental capital is about 119.9 billion US dollars; in November, the large-cap stocks exceeded the ratio to 20%, while the mid-cap stocks were divided, the incremental capital was about 207 billion yuan.
The incremental funds brought by the completion of the three steps totaled US $ 455 billion, of which approximately 20% were passive funds, amounting to US $ 91 billion, and active funds were approximately 364 billion.
CITIC’s calculations may also be close: It is estimated that the expansion of MSCI will bring incremental capital investment 172 in June and August.
700 million US dollars (about RMB 1156.
100 million yuan), which will bring incremental funding of 308. in November
800 million US dollars (approximately RMB 2067.
(100 million yuan), bringing a total of 654.
200 million US dollars (about RMB 4379.
JP Morgan Chase predicts that after 100% of A shares are included in MSCI, it is expected to trigger a total of $ 76 billion in passive capital inflows.
At that time, China A shares are expected to account for 38% in the MSCI China Index, MSCI Emerging Markets Index and MSCI Asia Pacific (except Japan) Index.
2% and 15.
9%; China will account for nearly 42% of the MSCI Emerging Markets Index overall.
FTSE Russell is the second major global stock index company to include Chinese A shares in its index system after MSCI.
FTSE Russell is a wholly-owned company under the London Stock Exchange. The FTSE Global Stock Index System is the flagship index system of the FTSE Russell Index.
By the end of 2017, there were about 16.
The USD 2 trillion fund is allocated with the FTSE Index as the benchmark. The FTSE Russell Global and Emerging Markets Index covers approximately 1.
$ 5 trillion in funding.
China National Securities Research pointed out that the passive incremental funds brought about by the first step of the “share of wealth” of A shares in June were about 2 billion US dollars.
According to FTSE Russell official data, after the completion of the three-step inclusion of the first phase of A shares, the weight of the FTSE Emerging Index will reach 5.
5%, bringing in passive incremental funds of $ 10 billion.
CITIC Securities estimates that the total net inflow of incremental funds in the A-share market in 2019 will be approximately 895.2 billion yuan, of which from the second quarter to the end of the year, it is expected that foreign capital will be the absolute bulk of incremental capital and is expected to reach 524.1 billion yuan.The inflow rhythm and configuration style will have a decisive effect on the market during the year.
Dongxing Securities estimates that the experience of Taiwan and South Korea shows that after the inclusion of MSCI, it will bring about an increase of about 15% of foreign shareholding in 10 years. If the total market value of A shares is 80 trillion in 10 years and the next 10 years,Proportion of foreign investment increased 7.
5%, it will bring about 6 trillion yuan in foreign investment.
Institutional investors may become the market leader and the continuous influx of global capital is causing major changes in the investor structure of the A-share market. It is time to say goodbye to the “retail market” and institutional investors dominate the A-share market.
National Gold Securities research shows that as of the end of the first quarter of 2019, public funds (including public funds and special fund accounts) held a total market value of A shares 1.
95 trillion yuan, accounting for 3.7% of the total market value of A shares
19%, accounting for 4.
The total market value of foreign shares is 1.
68 trillion yuan, an increase of 0 compared to the end of 2018
53 trillion yuan, holding a share of 2.
76%; under the market capitalization of circulation, the value of stocks held by foreign institutions in the first quarter of 2019 reached 1.
62 trillion yuan, holding a share of 3.
6%, of which QFII & RQFII holds 0.
59 trillion yuan, shares held by China Stock Connect 1.
03 trillion yuan.
The total market value of A shares held by insurance funds in the first quarter 2.
11 trillion yuan, accounting for 3.
46%, holding A shares in circulation 1.
58 trillion yuan, accounting for 3.5%.
Therefore, from the perspective of the proportion of market capitalization in circulation, foreign countries have exceeded insurance funds and become the second largest institutional investor in the A-share market, and their pricing power is rapidly increasing.
From the perspective of the proportion of stock market value held by professional institutional investors in the entire market, as of the end of the first quarter of 2019, the proportion of major institutional investors, including public funds, foreign exchange, and insurance funds, has also steadily increased.
Dong Dengxin, director of the Institute of Finance and Securities of Wuhan University of Science and Technology, said that the A-share market has been a typical “retail market” in the past.
The main characteristics of “retail markets” are short-term speculation and short-term speculation. They are more inclined to chase up and down, and chase short-term yields.
Institutional cities play a game among institutions. Institutions have capital advantages, expert advantages, information advantages, and institutions have alternative pricing and pricing rights. Most of them advocate value investment and long-term investment. Therefore, a strong group of institutional investorsIt is a stabilizer or ballast stone for market operation.
From the experience of other markets, the gradual increase in the proportion of foreign exchange holdings will also form a “replacement” effect on retail transactions.
Fortune Securities research shows that in the early 1990s, retail transactions in South Korea and China’s Taiwan stock market accounted for more than 80% of the total, and a downward trend emerged after the full opening of the securities market in the 2000s.
After the proportion of individual investor transactions in the two places dropped to about 50%, they remained relatively stable.
With the decline in the proportion of individual investor transactions, the trading style of individual investors in the two places has also changed, and the turnover rate has dropped from more than 200% in the early 2000s to less than 100%.
An individual investor gradually recognized the investment philosophy of the institution under the education of the market, and had more long-term holdings, most of which were short- and medium-term transactions.
At the same time, the trading volume structure of the securities markets of Japan, South Korea, and China Taiwan has a common feature, that is, the decline in the proportion of individual investor transactions is accompanied by the rise in the proportion of emerging transactions.
The market estimates that differentiated investment styles are changing. Foreign countries continue to allocate A shares on a large scale, which not only changes the structure of market investors, but also profoundly affects the investment style of market participation.
Anxin Securities pointed out that from the perspective of position characteristics, the biggest difference between overseas institutions investing in A shares through QFII and China Stock Connect is that QFII’s positions are highly concentrated and the financial proportion is extremely high; China-Hong Kong Stock Connect is scattered.
The biggest similarity lies in the fixed holders of A-shares’ core assets represented by the CSI 300 Index.
The QFII heavy storage industry has a concentrated configuration, of which financial stocks account for a very high proportion; the China Stock Connect holdings industry is scattered, with the exception of food and beverage, most industries account for less than 10%.
In terms of investment style, QFII and China Stock Connect have always preferred low price-earnings ratio companies (0-20 times) and are often stable; in terms of performance representativeness, QFII fluctuates between 10% and 20% of ROE, while China Stock Connect is more distributed.Between 5% -10% and 10% -20%.
With the A-shares overall index, QFII and China Stock Connect are more cautious about companies with strong profitability.
Dongxing Securities research shows that the capital of the Beijing under the interconnection mechanism is mainly invested in food, beverages and tobacco, durable consumer goods and clothing, and banking, insurance, diversified finance and other financial industries.
From the international experience, foreign countries like to invest in local advantageous industries.
During the opening phase of the South Korean capital market, industries such as electronic equipment and chemicals were more popular with foreign countries, while in Taiwan, China, they became food and semiconductor industries.
From the data point of view, the current food and beverage industries account for more than 20% of the rich A-shares, and the consumer durables (mainly household appliances, etc.) and the apparel industry also account for more than 10%.Advantage.
In addition, industries such as banking and non-bank finance are also very popular in foreign countries.
The specific configuration is mainly the leading enterprises in various industries.
Foreign investment styles are also affecting the behavior of other participants in the A-share market.
Statistics show that since 2017, the A-share market has seen significant differentiation characteristics. Undervalued and profitable companies have performed significantly better than small and medium-sized startups.
Since 2017, the SSE 50 Index representing Dabaima has gradually increased by 27.
25%, Shanghai and Shenzhen 300 gradually increased by 14.
84% in the same period, the CSI 500 index has gradually decreased by 20.
57%, the GEM index has gradually decreased23.
From the perspective of industry differentiation, as of June 25, of the 28 Shenwan first-level industries, the best performing this year is the food and beverage industry, which has gradually increased by 58.
From the perspective of individual stocks, while the market value of some leading enterprises has continued to increase, until the close of June 25, the Shanghai and Shenzhen stock markets with a market capitalization of less than 3 billion have reached 918 stocks.
Some people believe that the scale of funds managed by foreign-funded institutions is relatively large, and the sources of funds are relatively stable. Internally, a strict set of investment and research processes, post-investment management, operations, and risk control systems are often used, which also determines that their investment style is more robust and more stable.Pay attention to medium and long-term fundamentals and estimates.
Therefore, it is generally expected that high-quality leading companies with large market capitalization, underestimation and high profitability, especially leading food stocks with stable cash flow and high dividends, are in food and beverages, home appliances, medicines.
Li Xunlei, chief economist of China and Thailand Securities, pointed out that the industry concentration has increased the estimated size of the leading companies.
In general, the adjustment of the estimation structure of the stock market has started since 2016, but overall, the overall estimated level of the companies on the right is still low, and the estimated level of small and medium-sized companies is still high.
Therefore, in the context of the internationalization of the capital market, the structural adjustment of the estimation system has transformed the trend of differentiation and deepened.
Chuancai Securities pointed out that emerging market experience shows that increasing the MSCI ratio in the short term can lead to passive allocation of capital requirements, increase long-term linkage with the global market, decrease in change rate and turnover rate, and change in investor structure and investment style.
As overseas institutional investors pay more attention to value investment and long-term investment in their investment strategies, they may gradually influence the investment style and return to fundamentals and value investment.