Foreign Capital Is Optimistic About The Strategic Allocation Opportunities Of A Shares.

Since this year, major assets have been spinning rapidly.

In recent months, bond market and real estate market have gathered the main funds of the market, but A shares seem to be unattended.

By the rescue policy has not yet completely withdrawn and related policies tightening, A shares volatility and turnover activity dropped to a historical level.

However, from the recent R/QFII and Shanghai and Hong Kong through the flow of funds,

It seems that there has been a situation of contrarian filling; plus the recent regulation of the real estate market and the establishment of the deleveraging of the bond market, what does this mean for the future trend of A shares?

Recent data show that foreign professional institutional investors are continuing to trade in the past three quarters.

According to the latest data, the number of QFII and RQFII accounts hit a new high in the year. In late 9, foreign institutions and individuals holding domestic stocks increased by 55 billion yuan compared with the end of 6 in September.

In addition, Shanghai and Hong Kong through capital flows also showed similar trends.

Starting in October 18th, the northern capital has achieved net inflow for 6 consecutive trading days.

Statistics show that since October, the total net inflow of northern capital has reached 4 billion 15 million yuan.

On the other hand, southerly capital has accumulated a net inflow of 4 billion 56 million yuan since October.

With inflow

The capital is dropping rapidly, and the North-South funds are in a state of equilibrium. The net inflow is not only bi-directional, but also the net inflow amount is equal.

"In view of the current situation of A shares, it is more difficult to maintain earnings through traditional short-term tactical strategies, such as hot topics, new strategies, etc.".

Wang Bo, a senior researcher at Noah research and development center, told the first financial group that the biggest allocation of A share market in 2017 was strategic rather than tactical.

Specifically, the reason why foreign capital increases A shares is closely related to the idea of risk diversification.

Wang Bo told reporters that the correlation coefficient between the Shanghai Composite Index and the US Standard & Poor's 500 is 0.295, indicating that although the two tend to be in a consistent direction in the long run, the correlation between the two is relatively weak.

However, by comparing the S & P 500 with the FTSE Europe 300 index, the correlation between them reached 0.845, and the consistency between US stocks and European stocks is obvious.

In fact, it is precisely because the correlation between A shares and other overseas stock indexes is not high. "At the same level of income, the allocation of A share assets can effectively reduce the risk level of the entire portfolio. Therefore, regardless of the current asset allocation of overseas investors, the allocation of A shares can effectively improve the frontier of the effectiveness of their portfolios, especially in reducing the systemic risks of overseas economies."

Wang Bo told reporters.

This may be one of the reasons why foreign capital continues to increase in the near future.

Wang Bo also said,

After a sharp fall in 2015, it is in the consolidation stage of structural shocks such as 2001-2007 years and 2009-2015 years. "The latter is expected to usher in the upward trend, making it an excellent time node for overseas asset allocation A shares."

The central bank spread the bank's off balance sheet financing into the MPA generalized credit calculation, which led to speculation on the scale of financial control and the deleveraging of debt markets.

All sectors of the world are starting to talk about the possibility of outflow of bond market funds.

"This news has limited impact on the bond market, but it may still have an impact on the amount of capital and leverage.

For a long time, because of the cold market, banks and other institutional funds were mainly concentrated in the bond market, bond yields continued to flatten, and by adding leverage in a disguised manner to raise the yield.

The new rules of net pmission help the deleveraging process of the bond market, but have little impact on the overall bond market and may have a positive impact on the stock market. "

Guo Hongren, managing director of the open market of gphi asset, told the first financial reporter.

It is worth noting that Yan Ling, a macroeconomic analyst, told reporters that under the background of the financial resources, the MPA has never penetrated the underlying assets to the finance committee, and the future including bank funds may rely on outsourcing business and leverage to increase the yield.

Guo Hongren also believes that investment through professional institutions such as FOF may become a new trend.

In his view, in recent years, the size and quantity of public funds in China have shown explosive growth. As of October 17, 2016, there were 3380 public offering funds with a net asset value of 82508 billion yuan.

According to the estimated 10% of the scale of public fund raised by FOF in the United States, the scale of public FOF will reach 800 billion yuan.

In the light of the trend of future market, Wang Ling, research director of the Department of open market of geffer asset, told reporters that the recent macroeconomic stabilization and the guidance of the deleveraging of the bond market and the new regulations of the real estate market are expected to guide the outflow of capital into the equity market, and then the stock market has strategic investment opportunities.

"Besides the inflow of funds, the uncertainty in overseas markets has declined, which helps to enhance market sentiment.

For example, the US Federal Reserve raised interest rates in December on a basic basis, and the uncertainty of the euro was postponed, and the domestic exchange rate risk was relatively controllable. All these are favorable for the equity market.

However, she remains cautious and optimistic about the A shares in the short term, because the supporting factors of leveraged cattle do not exist and can only be used as an advantage in the equity market by turning the liquidity.

"A shares may still show a shock trend, but the interval is relatively small, there may still be band market."