Key points of the report:
① A-Shares have received a substantial inflow of funds for two consecutive years, behind which is the decline of residents’ willingness to buy houses and the relocation of residents’ assets caused by the decline of bank financial income; ② Looking forward to next year, in terms of capital supply, public funds are still the largest increment, but the inflow will slow down; The large-scale expansion of private placement this year is mainly due to the indirect allocation of equity assets by high net worth customers by withdrawing smaller absolute income products. This trend is expected to continue next year; The inflow of foreign capital may slow down due to factors such as the US economic recovery and the Fed’s interest rate hike; ③ In terms of capital demand, the central economic work conference again proposed the full implementation of the stock issuance registration system. It is expected that the implementation of the full registration system will be strengthened next year, the financing demand will be improved, and the IPO scale may be greatly improved. ④ On the whole, the capital supply side will decline slightly next year, while the demand side will improve with strong certainty. It is expected that the net inflow of A-share funds will slow down next year. Under the three assumptions of optimism, neutrality and pessimism, the net inflow will be 15123, 10588 and 452.2 billion yuan respectively.
Text summary
Where does the money come from: Residents’ assets are transferred from housing & financial management to equity market. ① The real estate policy continues to increase, and the residents’ willingness to buy houses has decreased under the background of “housing without speculation”. Since the second half of 2020, the policy has continued to exert force on the regulation of real estate: three red lines of real estate and the concentration management of bank real estate loans. The overall cooling of housing prices around the country is behind the decline in residents’ willingness to buy houses. ② The central interest rate is down, the investment scope is limited by the new asset management regulations, and the bank’s financial yield continues to decline, which has an important impact on the investment direction of funds: more low-risk preference funds will flow into public offering and fixed income products; Guide some funds to flow into the stock market; Bank financing will increase the proportion of equity asset allocation. ③ Under the “no speculation in housing and housing”, residents’ assets are facing “reconfiguration”, the interest rate center is declining with the medium and long-term economic growth, frequent credit events and the end of the transition period of new asset management regulations. The additional allocation of equity assets is still a medium and long-term trend.
Under the comprehensive registration system, the capital demand is increased, and the A-share capital inflow is expected to slow down next year. ① Since this year, public offering has maintained a high incidence, private placement has expanded significantly, foreign capital inflow has accelerated, and still contributes incremental funds to A-Shares under the background of market shock adjustment and increased volatility. ② Looking forward to next year, in terms of capital demand:
(1) The central economic work conference proposed that we should pay close attention to the pilot of comprehensive reform of market-oriented allocation of factors and fully implement the stock issuance registration system. It is expected that the implementation of the comprehensive registration system will be strengthened next year, the financing demand will be increased, and the IPO scale may be greatly improved; (2) Since 2019, the scale of lifting the ban on restricted shares & the proportion of industrial capital reduction in the lifting of the ban has increased. Next year, industrial capital reduction may still be an important capital outflow. ③ In terms of capital supply: (1) public funds are still the largest increment, but the profit-making effect has decreased this year and the fund investment experience is poor. It is expected that the public offering will slow down next year; (2) The large-scale expansion of private placement this year is mainly due to the fact that under the strict control of real estate, more property market funds with low risk preference and high net worth customers indirectly allocate equity assets by withdrawing smaller private placement funds. This trend is expected to continue next year; (3) The shareholding ratio of insurance funds may decline further, but the range is less than this year. Under the scale expansion hedge, insurance funds will still contribute incremental funds; (4) Affected by factors such as the US economic recovery and the Fed’s interest rate hike, the pace of foreign capital inflows may also slow down; (5) With the expiration of the new regulations on asset management, the scale of asset management products will grow steadily, and equity investment is expected to usher in an inflection point and steadily contribute incremental funds; (6) Retail investors’ market entry sentiment follows the market. It is difficult for the market to have a trend market under the downward pressure of the economy next year. It is expected that the scale of retail investors’ market entry will decline slightly. ④ On the whole, the capital supply side will decline slightly next year, while the demand side will improve with strong certainty. Under the three assumptions of optimism, neutrality and pessimism, the net inflow of A-share funds next year is expected to be 1512.3 billion yuan, 1058.8 billion yuan and 452.2 billion yuan respectively.
Note: this year is 2021, next year is 2022, and last year is 2020; Unless otherwise specified, the “prediction” mentioned in this article is the prediction of Soochow strategy team.
Risk warning: global epidemic spread risk and vaccine effectiveness; Macroeconomic growth is less than expected; Inflation soared sharply in the short term and monetary policy tightened rapidly; Historical experience does not represent the future; The fund calculation is obtained through the model assumptions, which deviates from the actual value.
（ Soochow Securities Co.Ltd(601555) ）
