The “golden nine” market is being interpreted in September, and the main stock indexes of A-Shares have been red for four trading days.
According to the 21st Century Business Herald reporter, long-term funds are accelerating their entry into the market and distributing a shares.
For example, it was only four trading days in September, and the capital flowing northward had reached 21.73 billion, almost catching up with the 2.331 billion in August.
In fact, the new policy is promoting the entry of long-term funds into the market, and trillions of long-term funds such as foreign capital, social security funds, insurance and pension funds can be expected to enter the market. In the first half of the year, long-term funds generally preferred white horse blue chips.
trillion long-term funds are expected to enter the market
As of September 5, the net inflow of funds from northbound has been 141.084 billion yuan this year.
“Foreign capital inflow is a long-term trend, and the proportion of foreign capital held in A-Shares will have a large proportion of room for improvement.” Fan Bo, vice president of bedrock capital, pointed out.
According to the previous prediction of MSCI, each 5% increase in the inclusion factor will bring about $22 billion in incremental funds to a shares. In the long run, it is expected that foreign capital will continue to flow into A-Shares at an average rate of more than 300 billion yuan per year. The industry believes that next, foreign capital is expected to surpass public funds and private funds and become the largest single institutional category in the market.
“As foreign institutional investors represent long-term funds such as pensions and sovereign funds, they can more thoroughly practice the concept of value investment. Therefore, the increase in the proportion of foreign institutional investors will help the A-share market form the mainstream concept of long-term value investment.” Bai Haifeng, fund manager of China Merchants MSCI China A-share international index.
In fact, in addition to foreign capital as long-term funds, the recently introduced new policies are also promoting the admission of China’s long-term funds.
On August 31, the financial stability and Development Commission of the State Council held its seventh meeting and clearly proposed to create good conditions for more long-term funds to continue to enter the market.
“The long-term funds of A-Shares include insurance, social security, annuity and foreign capital. The positions of public and private funds are relatively short-term and medium-term.” On September 5, Zhang Ting, a researcher of GESHANG wealth, introduced.
In fact, the long-term capital of a shares, in addition to the capital that foreign capital may bring an average of more than 300 billion yuan a year, China’s long-term capital has a lot of room for development.
“At present, China’s insurance, social security and Annuity Account for only 5.6% of the free circulation market value of a shares, which is much smaller than that of the United States. Therefore, there is still a lot of room for A-Shares to introduce long-term funds.” Zhang Ting said.
Liu Youhua, a researcher of private placement paipai.com, said that in terms of incremental funds, at the end of 2018, the total assets of the social security fund were 2235.378 billion yuan, including 2061.018 billion yuan of domestic investment assets. Calculated according to the minimum 30% investment threshold, the capital scale that can be invested in the A-share market was 618.3 billion yuan, excluding the current market value of 150 billion yuan held by the social security fund, Theoretically, it can bring no less than 450 billion yuan of incremental capital to A-Shares in the future.
According to the data released by the China Banking and Insurance Regulatory Commission, as of the end of April this year, the fund utilization balance of the insurance industry was 16.9922 trillion yuan, of which the amount invested in stocks and securities investment funds was 2.137 trillion yuan, accounting for about 12.58%. It is roughly estimated that if the upper limit of the equity investment proportion of insurance funds increases from 30% to 40%, assuming that the proportion of insurance companies investing in stocks and partial stock funds increases by 5 percentage points, it will bring about 800 billion yuan of incremental funds to the capital market.
long term funds prefer white horse blue chips
In fact, the arrival of all kinds of huge long-term funds is of great significance to a shares.
“At present, many long-term investors in the A-share market are institutional funds. The proportion of institutional funds in the A-share market has now been equally divided with that of retail investors, accounting for about 50% respectively. This is also the reason why value investment can be popular in recent years, because most institutional investors focus on Enterprise fundamentals. They are the basis of market stability. Only by guiding long-term funds into the market, can the A-share market The market can get out of the long bull and slow bull market like US stocks. ” On September 5, Yang Delong, chief economist of Qianhai open source fund, said.
So, what stocks do long-term funds like to invest in?
According to the statistics of the 21st Century Business Herald reporter, in the first half of 2019, the 10 stocks with the largest market value held by insurance funds, enterprise annuities, insurance companies, land stock connect, QFII and other long-term funds were: China Life Insurance Company Limited(601628) (601628. SH) 548.448 billion yuan, Ping An Bank Co.Ltd(000001) (00000 1. SZ) 147.668 billion yuan, China Merchants Bank Co.Ltd(600036) (600036. SH) 120.723 billion yuan, Kweichow Moutai Co.Ltd(600519) (600519. SH) 111.195 billion yuan, Shanghai Pudong Development Bank Co.Ltd(600000) (600000. SH) 73.044 billion yuan Ping An Insurance (Group) Company Of China Ltd(601318) (601318. SH) 71.507 billion yuan, Midea Group Co.Ltd(000333) (000333. SZ) 62.33 billion yuan, Industrial Bank Co.Ltd(601166) (601166. SH) 60.361 billion yuan, China Minsheng Banking Corp.Ltd(600016) (600016. SH) 55.423 billion yuan, China Yangtze Power Co.Ltd(600900) (600900. SH) 51.198 billion yuan.
In the first half of the year, all the 10 listed companies with the most shares held by the above long-term funds were white horse blue chips, of which 7 were in the financial industry.
Recently, a venture capital investment manager pointed out, “at present, we are optimistic about the opportunities in the equity market. The phased investment value has been obvious. We should actively grasp the opportunities and be optimistic about technology + consumption in the sector.”
In this regard, Jia Zhixiang, director of investment and research of Tianxiang investment consulting, said to reporters: “long-term funds have strong stability, less timing, based on value investment and value enterprise growth. The performance of long-term funds is good, which is a model of value investment.”
Liu Youhua said: “social security and other institutional investors have low risk tolerance, long investment period and low requirements for income. They may prefer some white horse blue chips with low valuation and high dividend rate.”
Zhang Ting believes that “in the future, the influx of A-share long-term funds will accelerate. In the case of these capital inflows, the effectiveness of the A-share market will be strengthened and gradually mature, but it also means that the excess return will be more and more difficult to obtain, the concentration of various industries will rise, and the advantages of industry leaders will be gradually prominent.”
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(21st Century Business Herald)
