Another round of adjustment of FTSE Russell index components has come.
On March 2 Beijing time, FTSE Russell announced the quarterly audit change results of FTSE China A50 and other indexes.
specifically, the components of Bank Of Ningbo Co.Ltd(002142) , China State Construction Engineering Corporation Limited(601668) , Postal Savings Bank Of China Co.Ltd(601658) FTSE China A50 Index are deleted, and Aier Eye Hospital Group Co.Ltd(300015) , China Life Insurance Company Limited(601628) , Eve Energy Co.Ltd(300014) . The change will take effect after the closing on Friday, March 18, 2022
The Chinese reporter of the securities firm noted that the market value of the constituent stocks included in the FTSE China A50 Index has risen strongly in the past three months or the past six months, while the market value of the three stocks transferred out of the index has shrunk significantly, especially Aier Eye Hospital Group Co.Ltd(300015) and Eve Energy Co.Ltd(300014) . The market value has shrunk significantly in the past three months, falling below the 200 billion yuan mark.
The inclusion and elimination of FTSE index, on the one hand, reveals the new trend of funds, on the other hand, it obviously has a great impact on individual stocks, which will lead to the purchase and sale of passive funds.
Although the performance of A-Shares has been poor and the net value of public and private equity funds has fallen sharply since this year, foreign investors continue to be optimistic about China and the trend of increasing positions in China remains unchanged. In January, foreign capital net increased its holdings of domestic bonds and stocks by US $41.6 billion, and the cumulative net purchase of northbound funds has also reached 23.255 billion yuan this year.
three shares are included in FTSE China A50 Index
On March 2, FTSE Russell announced the quarterly review and change results of FTSE China A50 Index, FTSE China a150 index, FTSE China A200 index, FTSE China a400 index and FTSE China a small cap stock index.
specifically, FTSE China A50 Index constituent stocks are newly included in Bank Of Ningbo Co.Ltd(002142) , China State Construction Engineering Corporation Limited(601668) , Postal Savings Bank Of China Co.Ltd(601658) ; Delete Aier Eye Hospital Group Co.Ltd(300015) , China Life Insurance Company Limited(601628) , Eve Energy Co.Ltd(300014) . The change will take effect after the closing on Friday, March 18, 2022 (i.e. Monday, March 21, 2022)
FTSE China A50 Index was compiled and released by FTSE Russell. The index is composed of 50 stocks with the largest total market value in the Shanghai and Shenzhen stock exchanges, reflecting the performance of the stocks of the top 50 most influential listed companies in the A-share market. Many international investors regard this index as an accurate indicator to measure the Chinese market.
Some people in the industry said that the inclusion and transfer out of the FTSE index follow certain rules, and the most important factor is the market value. 200 billion yuan is often an important threshold.
The Chinese reporter of the securities firm noted that the latest market values of Bank Of Ningbo Co.Ltd(002142) , China State Construction Engineering Corporation Limited(601668) , Postal Savings Bank Of China Co.Ltd(601658) and Postal Savings Bank Of China Co.Ltd(601658) were 251.6 billion yuan, 218.1 billion yuan and 514.8 billion yuan respectively. In terms of share price performance, the above three stocks have achieved strong gains in the past three months, with increases of 2.53%, 10.87% and 8.84% respectively; The increase in the past six months was 19.53%, 1.56% and 5.79% respectively.
The market value of the three stocks excluded from the index, Aier Eye Hospital Group Co.Ltd(300015) , China Life Insurance Company Limited(601628) , Eve Energy Co.Ltd(300014) has shrunk significantly. In particular, the market value of “yanmao” Aier Eye Hospital Group Co.Ltd(300015) and lithium battery leader Eve Energy Co.Ltd(300014) , has shrunk significantly in the past three months, falling below the 200 billion yuan mark. Among them, Aier Eye Hospital Group Co.Ltd(300015) plummeted by 15.63%, with the latest market value of 192.2 billion yuan Eve Energy Co.Ltd(300014) fell by 41% and its market value fell to 160 billion yuan.
It is worth noting that Eve Energy Co.Ltd(300014) was newly included in the FTSE China A50 Index in December last year, and its market value soared to 280 billion yuan at that time. However, the market value of the index fell sharply only four months after it was eliminated.
some analysts said that being excluded from the index will have a certain negative impact on the stock price in the short term. The passive funds following the FTSE China A50 Index have passive liquidation and sale operations, but the stock price is still related to the fundamentals of the company in the long term
It is understood that the constituent stocks of FTSE China A50 Index conduct quarterly audit in March, June, September and December every year. The quarterly review uses the closing data of the third Friday in February, may, August and November for component stock review. The adjustment of any component shares will be implemented after the closing of the third Friday in March, June, September and December.
foreign capital continues to be optimistic about Chinese assets
Since this year, the performance of A-Shares has been poor. The CSI 300 index has fallen by 7.32% and the gem index has fallen sharply by 14.69%. Institutional investors represented by public offering and private placement have suffered great losses and the market sentiment is depressed. However, foreign investors continue to be optimistic about China and buy Chinese assets.
according to the statistics released by the State Administration of foreign exchange recently, foreign capital net increased its holdings of domestic bonds and stocks by US $41.6 billion, and domestic entities under Hong Kong stock connect net bought Hong Kong stocks, equivalent to US $40.1 billion
As far as northbound funds are concerned, the trend of foreign capital increasing positions in A-Shares this year remains unchanged, with a cumulative net purchase of 23.255 billion yuan since this year. Some industry insiders said that with the gradual emergence of A-share valuation advantages, the long-term inflow of foreign capital into the A-share market remained unchanged.
In the past three months, the five stocks with the largest net purchases by northbound funds were China Merchants Bank Co.Ltd(600036) , Zijin Mining Group Company Limited(601899) , China stock market news, Ping An Insurance (Group) Company Of China Ltd(601318) and Sungrow Power Supply Co.Ltd(300274) , with net purchases of 13.008 billion yuan, 5.648 billion yuan, 4.812 billion yuan, 4.434 billion yuan and 3.974 billion yuan respectively.
With the substantial growth of China’s new social finance and looser monetary policy, coupled with the attractiveness of stock valuation, many foreign investors are optimistic about the future performance of a shares.
recently, Miao Zimei, director of Asian Equity Research of Fidelity International, said that compared with its global peers, the forward-looking valuation indicators of Chinese companies are more attractive, and China’s stock market is likely to outperform emerging markets in 2022
The stock strategy analyst team of Goldman Sachs Group believes that the opening and reform momentum of China’s capital market makes the A-share market more valuable and accessible to international investors. It is expected that international investors will continue to pay attention to and allocate A-Shares in 2022, and the annual net purchase scale of northbound funds is expected to reach US $75 billion, about more than 470 billion yuan.
