15 Trading Days Outflow 58 Billion 100 Million: North Capital Departure Short Term Hedging

In February 3rd, after the Chinese stock market resumed trading after the Spring Festival holiday, the A shares plummeted, but on the same day, the north capital went against the other side. The net inflow of funds on a single day was as high as 18 billion 100 million yuan.

At that time, the market was described as a big drop and big buy, and then A shares rebounded sharply, and north capital continued to flow fiercely.

However, according to the twenty-first Century economic report reporter tracking data, the recent northward capital has begun to have a different choice. In the past two weeks, the northward capital has ended a large-scale inflow, and the net outflow has become the norm.

However, some market participants are unable to understand the current outflow of funds in North China.

From a global perspective, the new crown pneumonia epidemic continues to spread throughout the world, and major stock markets in many countries have plummeted.

Under such circumstances, the domestic epidemic is slowing down and the economic order is accelerating and recovery. Foreign capital has not gone further but has chosen to leave quickly. What is the purpose of it?

In March 12th, there was a large net outflow of capital in the north, and the net outflow of north capital reached 8 billion 380 million yuan as of the closing date.

Game equity investment risk

Beginning in February 21st, the northward capital began to shift to the stage of net outflow, and the total amount of capital outgoing on the day was 1 billion 120 million yuan.

According to the twenty-first Century economic news reporter statistics, since the beginning of February 21st, only 4 trading days have seen net inflow in the 15 trading days.

That is to say, the trend of going northward for most of the time is leaving.

From the scale of transactions, since February 21st, the total amount of capital outflow has gone up to 58 billion 100 million yuan, which has also brought the net inflow of capital up to 28 billion 500 million yuan this year. If the capital outflow continues in the future for some time to come, it will still maintain the current pace, so the overall northbound capital will show a firm departure in 2020.

From the perspective of individual stocks, foreign investment is still concentrated in big blue chips. According to the statistics reported by the economic news reporters in twenty-first Century, in the past 7 trading days, the top five companies selling foreign capital were China Ping An, Guizhou Moutai, Dongfang fortune, China Merchants Bank and BOE A. The amount of foreign investment sold was 3 billion 430 million yuan, 1 billion 260 million yuan, 970 million yuan and 9.1 yuan respectively. Billion yuan and 880 million yuan.

Corresponding to the development of overseas outbreaks, the number of confirmed data has begun to rise sharply since February 21st, and the main market of the world began to decline continuously.

Although the domestic stock market has also fallen along with the main markets in the world at some time points, A shares have been very resistant since the resumption of the market. The external impact is only to allow A shares to enter a stage of strong volatility, but not a sustained sharp drop.

At the same time, the domestic epidemic has eased and the social and economic order has been restored. Many market views also point out that A shares can be the best choice for global assets hedging. So what does the continuous net outflow of north capital mean at this time?

Xie Yaxuan, chief macroeconomic analyst of China Merchants Securities Research and development center, said that why foreign investment does not buy Chinese assets at present, and we should not only look at the domestic situation, but also judge the foreign macro situation.

He said, "overseas fermentation is always the main reason for the sharp adjustment of risky assets. At present, the epidemic situation in Europe and the United States is still in the development stage, and there is no turning point in the number of confirmed cases. At the same time, the fall in oil prices will make corporate credit spreads widening significantly, the risk of corporate default will rise, and the risk appetite of the whole market will deteriorate. The main reason for foreign capital to withdraw from China's stock market is the volatility of the current epidemic and the sharp decline in oil prices.

In addition, some people pointed out that international investors do not buy Chinese assets in the short term, but sell Chinese assets. A more important reason is that stock assets are risk assets after all.

"From the market trend in March 9th, the yen and the euro rose by 2.86% and 1.49% against the US dollar respectively, indicating that the conversion of funds from the US dollar to the yen and the euro, but the index of the main European countries and Japan's stock market did not rise because of the inflow of funds. A bigger possibility is that these funds will flow into the bond market of the countries concerned and buy away the risk assets such as treasury bonds. A major brokerage analyst said.

Medium and long term trends remain unchanged

Despite the fact that foreign capital is showing a net outflow from the north capital channel, reporters and many people in the market have realized that the market will reach a unified consensus on the long term addition of A shares to foreign investment. It is considered that some foreign investment fleeing A shares is only a short-term act of avoiding risks.

Since 2018, foreign capital has continued to flow. According to Wind statistics, the cumulative scale of foreign capital inflow has exceeded 1 trillion yuan since the opening of Shanghai and Shenzhen port.

There is a market organization's point of view that many of these funds are in the medium and long-term allocation of A shares type, short-term operation of the funds to buy and sell is a minority, this stage of foreign capital showing a certain scale of departure, does not mean that the trend of foreign investment in A shares has changed.

Yang Lingxiu, an overseas strategy analyst at CITIC Securities, also pointed out: "the global market has plummeted under the impact of the new crown pneumonia epidemic. But we expect Chinese stocks to be attractive to overseas investors as China's epidemic is controlled, resumed work, interest rates fall and liquidity is abundant.

Xie Yaxuan said: "overseas investors' backyard fires" choose to sell Chinese assets. On the other hand, they also show that China's capital market liquidity is good, the market has depth, and can resist foreign capital flows under the current situation.

Xie Yaxuan also put forward a hypothesis that he did not rule out the future high-end vehicle manufacturing, medical equipment and other high-end manufacturing industries and even a part of the service industry after the impact of the epidemic. He chose the possibility of layout in China for the needs of industrial chain safety and backup.

In addition, from the latest land share holding data and plate distribution, the capital shareholding continued to be small, the market share of main board holdings continued to decline, and the share value of small and medium sized boards and gem continued to rise.

Among them, the share of GEM has been expanding since 2019, and the recent outflow of foreign capital data is also consistent with this trend. Therefore, some market views also believe that foreign capital will be concentrated in TMT, middle reaches manufacturing and healthcare industries.

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