Northbound Capital Is Coming Back. These Industries And Stocks Are Most Popular.

Judging from the short-term A share market valuation level, it is the best time for foreign capital to configure A shares. After A shares adjusted following the adjustment of the external market, the market index fell to the 2800 point interval, and the overall valuation of the market hit a low level again.

"North capital has begun to match the domestic market." In April 14th, a fund manager and reporter of a large public fund company in Beijing said after the exchange.

In April 14th, there was a "runaway" inflow pattern in the north capital, and the net inflow scale of the whole day was as high as 14 billion 229 million yuan. In one fell swoop, the state of the northbound capital in the same year changed from net outflow to net inflow, and in April 15th, the capital in the north still maintained the enthusiasm of inflow of funds. On the same day, the net inflow of north capital was 3 billion 354 million yuan.

Now, with the promotion of A share internationalization, foreign investment has become an important force that can affect the A share market sentiment. In April 14th, the fierce flow of capital in North China drove the market out of a good market.

However, since the beginning of this year, the trend of northward capital has been "ups and downs", and there has been a large-scale net inflow and a massive net outflow in less than four months. Therefore, there are various discussions in the market for the return of the north capital regulation.

The core of the discussion is whether the inflow of north capital is a short-term impulse operation or a re establishment of the trend of continuous allocation of A shares in north capital?

According to an interview with a number of agencies and a number of senior market participants in the twenty-first Century economic report, the market generally believed that after going through the panic market in Europe and America, it would be a medium and long term behavior to reinvest A shares in the north capital. The return of the northbound capital to the net inflow is the beginning of this round of foreign capital's further matching.

Judging from the short-term A share market valuation level, it is the best time for foreign capital to deploy A shares. Visual China

Crisis lifted and risk appetite rose.

This year, north capital such as roller coaster general, first in early February after the A share market resumption of trading, buy a big copy, in the short term, nearly 100 billion capital flows fiercely. But then the epidemic continued to spread in the world, the European and American markets fell sharply, and the north capital turned into a risk avoidance mode. In a short span of a month, it completed a 100 billion scale net outflow. Now, the capital in North has begun to return to A shares.

There are clear reasons behind the massive influx and outflow of the first two northbound funds during the year. What is the logic behind the return of A shares to the north capital?

First of all, we need to understand the background of the last northward outflow of funds. According to the previous interview, the core factor of foreign investment withdrawal in March is to cope with the liquidity pressure of overseas markets, that is, the backyard fire, so that we have to sell overseas A through selling good liquidity.

In response, Zhang Qiyao, a strategist at Guosheng securities, pointed out that after overseas markets continued to be volatile and asset prices fluctuated sharply, signs of financial crisis appeared in the financial markets. Insufficient liquidity led to cash shortage and brought various asset selling including hedge assets (gold). At the same time, considering the characteristics of the product level, due to the fact that there are a lot of top-down tactical allocation funds and index tracking funds in international funds, the allocation of foreign capital to the A share market is bound to be affected by the external environment. In most emerging markets, when risk appetite falls across the board and the related fund products are substantially redeemed, asset sell-off will also happen in the A share market.

Therefore, the core factor of the reflow of foreign capital is that the risks in overseas markets, especially in Europe and the United States, will be lifted in the near future. Xie Chao, an analyst at Everbright Securities, said: "the return of funds in the north is consistent with our prediction in the two quarter strategy. The liquidity crisis caused by the panic collapse of US stocks and the rise in the US dollar index has been resolved, and A The expected growth rate implied in the stock market valuation is lower than the long-term potential growth rate of the economy and has entered the interval worth the value investment. After the liquidity crisis is resolved, the capital in the North should return the premium assets of A shares.

Li Lifeng, chief strategist of state securities, said in an interview with reporters: "I think the main factor is that the global risk appetite has been upgraded, which is no exception for A shares. This indicates that global funds have begun to reconfigure A shares or to configure global assets after passing through the stage of extreme panic."

What does money flow back to buy?

From this trend of inward capital inflow, since March 24th, north capital has begun to stop the operation of large net sales and tentatively "reflux". As of April 15th, only 13 trading days, only 4 trading days net outflow. However, the amount of net inflow in the first half of the 13 trading days is not large.

Since April 7th, the north capital has opened up a rush to raise funds. Following the net inflow of 12 billion 674 million yuan in April 7th, it once again entered a net inflow of 14 billion 229 million yuan in April 14th.

So, is the net inflow of the northbound capital short acting or reestablishing the trend of foreign capital plus A shares? Many market participants believe that the withdrawal of some foreign capital from A shares is a phased short-term behavior. From the medium to long term trend, it will be a consensus of all parties to add A shares to foreign investment in the medium and long term.

Zhang Qiyao said: "according to the experience of the past 3 years, during the period of significant fluctuations in the external market, especially in the US stock market, A shares have inevitably been reduced. However, the impact of foreign capital formation on foreign investment is relatively limited. Secondly, referring to the experience of Korea and other markets, even during the global financial crisis, there was no systematic withdrawal of foreign capital. During the global financial crisis in 2008, there was no systematic withdrawal of foreign capital in South Korea and other markets, especially in the initial stage of opening up and relatively low foreign investment. The long term admission process of foreign capital was not interrupted by the crisis.

In addition, there is also a market view that, from the short-term A share market valuation level, it is also the best time for foreign capital to configure A shares. After the A shares adjusted following the adjustment of the external market, the market index fell to the 2800 point interval, and the overall valuation of the market hit a low level again.

"By comparing the figures of the single day net inflow and the closing number of Shanghai Composite Index, some institutions found that the entry of north capital in the low Shanghai Composite Index laid the foreshadowing for the subsequent rebound of the index, and the timing of capital inflow and outflow usually corresponded to the top of the A shares. At present, it is obvious that the continuous inflow of foreign capital is also an inevitable event when the epidemic situation is stable, the orderly recovery of economic production and the low valuation of the market. " Ze Hao investment partner Cao Gang told reporters.

In addition, the market is concerned about the problem of buying stocks in the north. Zhang Qiyao said: "since the return of capital in North China, we have concentrated on the industries such as food and beverage, electronics, medicine and biology. According to our calculations, in the past three weeks, the rate of return of food, beverages, electronics, medicine, biology, banks and computers has reached a level of 4 billion 490 million yuan, 3 billion 612 million yuan, 3 billion 319 million yuan, 2 billion 129 million yuan and 2 billion 96 million yuan respectively.

Li Lifeng said, "according to our observation, north capital has recently increased the allocation of traditional infrastructure and related domestic demand, such as food and medicine, which is a feature since April."

In addition, reporters found that the recent return of the north capital is still a large-scale allocation of leading white horse shares as a safety pad for the overall allocation of shares.

According to Wind statistics, nearly seven days, Guizhou, Moutai, Wuliangye, Sany, Ningde times, the United States and other companies are among the best. The net inflow of funds is 3 billion 600 million, 1 billion 772 million, 1 billion 479 million yuan, 1 billion 389 million yuan and 1 billion 196 million yuan respectively.