In the first trading week of the year of the tiger, A-Shares continued the weakness before the festival and performed poorly as a whole. As of the closing on February 11, the Shenzhen composite index had been negative for five consecutive weeks, with a cumulative decline of 0.78% for the whole week. It hit a new low in nearly 16 months on February 8; The growth enterprise market (GEM) refers to three consecutive negative days on the weekly line, a new low since April 14, 2021, with a cumulative decline of 5.59% for the whole week; The Shanghai Composite Index rose 3.02% in the whole week, but failed to stand back to the five week line.
The market is down. What is the next trend of institutions investing in large-scale self purchase funds before the Spring Festival? Bodao fund and magic square quantitative said they would continue to buy their own fund products.
Bodao fund told the first financial reporter that the self purchase of Bodao fund is a long-term action and I believe it will continue, especially when the market is low, it will increase the self purchase strength.
The person in charge of magic square quantification also told reporters: “we will continue to buy our own fund products for a long time. At present, the employees and shareholders have bought them, and some of the company will buy them later.”
Lin Jiayi, CEO of Xuanjia finance, told reporters that as long as the institution is profitable, self purchase can be a long-term behavior. A small number of large and profitable institutions may take self purchase as one of their long-term strategies, which has nothing to do with the point and bottom of the market index.
self purchase amount reached a historic high
On the evening of January 28, magic square quantitative announced that out of its firm optimism about China’s economy and long-term confidence in the capital market, magic square quantitative and all employees and shareholders decided to do their best to support the A-share market with their own funds. After coordination, all employees and shareholders will raise no less than 150 million yuan of their own funds within three trading days. Meanwhile, magic square quantification will raise no less than 200 million yuan of the company’s own funds within 10 trading days. All the above 350 million yuan will apply for the company’s products and invest in equity assets in the A-share market.
Not only magic square, but also other head quantification institutions have announced self purchase.
On the evening of January 28, Jiukun Investment announced that based on its long-term firm optimism about China’s capital market and full confidence in its own investment management ability, and in line with the principle of sharing risks and interests with the majority of investors, it will use its own funds of 100 million yuan to apply for fund products such as its stock optimization strategy, index enhancement strategy and stock long short strategy, And promise to hold it for at least 3 years. The subscription date is the latest fixed opening day of fund products from the announcement date.
Xinrui 10 billion quantitative private equity Hefu investment also announced on January 28 that the company has recently used its own funds of 40 million yuan to purchase the fund product shares managed by the company, and plans to increase the purchase scale of its own funds in the future.
It is not only quantitative private placement institutions that respond to “raising the backbone of a shares”, but also head public offering institutions set off a wave of self purchase before the festival.
China Greatwall Securities Co.Ltd(002939) the research report shows that after the self purchase amount of 15 public offering institutions reached 1.1 billion yuan on January 27, several public offering funds successively issued announcements on self purchase of their equity public offering products on January 28 and January 29, including Boshi fund, BOCOM Schroeder, Haifutong, Qianhai Kaiyuan, etc.
According to incomplete statistics, during the A-share adjustment period, the number of self purchased public funds reached 24, with a total self purchase amount of more than 1.5 billion yuan. Since the beginning of the year, the total self purchase amount has been close to 2 billion yuan, reaching a historic high.
In terms of amount, huitianfu’s self purchase amount temporarily ranks first in the self purchase list of public funds, and the self purchase amount of the four institutions exceeds 100 million, ranking in the forefront of the industry. Of the 24 public funds announced, only four have purchased less than 50 million yuan. From the perspective of holding period, 18 of the 24 public fund companies that issued the announcement gave a written commitment to the lower limit of holding period. Among them, Ruiyuan fund has the longest holding period, with a holding time of no less than three years, the subscription part of inherent funds of no less than five years, and Qianhai Kaiyuan, Nanfang and China Europe have promised a holding period of no less than three years.
the rebound of A-share market is lagging
In fact, from the data over the years, the self purchase amount at the end of the year has jumped into the self purchase law of public funds in recent years. In the past eight years since the resumption of trading, the self purchase shares of public funds have soared in December every year. In terms of amount, the self purchased share of the fund in December 2017, 2019, 2020 and 2021 was the highest in the whole year, and the self purchased share of the fund in December 2014, 2016 and 2018 was the third in the whole year.
On a month on month basis, the average month on month growth rate in December of that year was 145.42% compared with that in November. Over the past three years, the proportion of net self purchase amount of public funds in December in the whole year has been stable at more than 15%. It can be seen that the share of self purchase at the end of the year has jumped into the general law of self purchase of public funds.
China Greatwall Securities Co.Ltd(002939) the research report shows that from the results, the two self purchase tides of public funds rebounded to a certain extent in the subsequent market, but it is difficult to reverse.
Compared with the net self purchase amount of the fund, the self purchase amount of “partial stock type + mixed type” is more suitable for statistical caliber.
Taking the monthly sum of “partial stock + mixed” self purchase amount as the observation caliber, the tide of large-scale public offering self purchase mainly includes the following two waves:
1) in June 2015, the A-share market plummeted and the market sentiment dropped significantly. The public offering self purchase tide started in July and continued to August. The A-share market recovered briefly from September, but fell again in 2016.
2) from February to April 2020, the epidemic broke out outside China, the US stocks were blown for many times, and the panic continued to intensify. The tide of public offering self purchase began at the end of February and the beginning of March. The peak of self purchase was in the whole March. The A-share market began to recover from April.
The common law of the two self purchase tides is that the rebound of the A-share market lags behind the fund self purchase tide, and the rebound range is limited, which is difficult to reverse.
However, the public offering to inject incremental funds into A-Shares and build an “emotional bottom” is a common feature of the public offering self purchase tide, and it can indeed stabilize the market sentiment to a certain extent.
Liu Cunxin, assistant fund manager of private placement network, told reporters that generally speaking, self purchase by fund companies is to stabilize investor sentiment and build confidence for investors.
On the other hand, they are full of confidence in the future market and their own investment and research strength. Therefore, only when the market is bad or the fund performance drops sharply will the fund company repurchase, and it is not ruled out that the fund company may fall and buy more, so as to show confidence, stabilize investor sentiment, reduce investors’ irrational redemption when the fund performance retreats, and affect the fund operation and the interests of existing investors.
