There are still two trading days left in the mainland stock market this year, but the turnover of the two cities has been about 256 trillion yuan since 2021, which has exceeded the highest year in history in 2015 and set a new annual record high.
the annual turnover of the two cities broke the record
As of the closing on December 29, the turnover of the two cities has been about 256 trillion yuan this year, exceeding the annual turnover of about 255 trillion yuan in 2015, the highest year in history.
There are still trading days this year, and the above transaction volume statistics do not include the transaction data of the shares of the Beijing stock exchange. If the transaction data of the remaining trading days and the Beijing stock exchange are added, the overall transaction volume of the mainland stock market this year will go to a higher level.
Since this year, the turnover of Shanghai and Shenzhen stock markets has been significantly enlarged and more sustainable. According to the statistics of the reporter of the securities times, the number of days in which transactions exceeded trillion yuan in the year has exceeded 60% of the total trading days in the year. In contrast, in 2015, the second highest annual turnover in history, only 115 of the 244 trading days traded more than trillion yuan, accounting for less than half. This shows that trillion transactions have gradually become the new normal of the mainland stock market.
The amplification of market transactions also helps the brokerage business of securities companies, which is still one of the main businesses contributing to its revenue. On the occasion of rising transaction volume, the revenue of many securities companies rose sharply in the first three quarters of 2021. For example, Citic Securities Company Limited(600030) , China Securities Co.Ltd(601066) , China International Capital Corporation Limited(601995) and other leading securities companies have exceeded the revenue of 2015 in the first three quarters of 2021 alone. However, there are not many securities companies whose net profit in the first three quarters of 2021 exceeds that in 2015.
A-share expansion + incremental capital entry
Behind the record high turnover of the mainland stock market, there are a variety of factors.
Zhang Xia, chief analyst of China Merchants Securities Co.Ltd(600999) strategy, analyzed in an interview with the securities times that the record high trading volume is the result of the joint action of A-share expansion and incremental capital entering the market. On the one hand, driven by the issuance system reform policies in the past two years, the A-share market has expanded rapidly, the market scale has expanded, and the market turnover has risen; On the other hand, driven by the non speculation of housing and housing and the profit-making effect, since 2019, residents’ funds have entered the market through equity products such as public offering and private placement funds, which has brought considerable incremental funds to a shares, raised the turnover rate and expanded the transaction volume.
GUI Haoming, a senior market person, also believes that there are many reasons why transactions in the mainland stock market are particularly active this year and the annual turnover has set a record high. First, the market “base” has significantly increased. This year, the number of IPOs reached more than 500, greatly expanding the market scale. Second, quantitative trading makes a great contribution to the trading volume. Quantitative trading has the characteristics of fast in and fast out, which is easy to produce trading volume. In addition, there are contributions from northbound capital and ETF.
According to the reporter’s statistics, from the beginning of 2021 to December 29, the cumulative turnover of capital of Northland stock connect has exceeded 27 trillion yuan, which not only exceeds 21 trillion yuan in 2020, but also nearly 19 times the total turnover of 1.47 trillion yuan in 2015.
In 2015, the capital turnover of Northland stock connect accounted for less than 0.6% of the turnover of the two cities in that year. Since the beginning of 2021, the capital turnover of Northland stock connect has accounted for more than 10% of the turnover of the two cities.
In addition, from the perspective of net purchase scale, the cumulative net purchase of Northland stock connect funds since the beginning of 2021 has been nearly 420 billion yuan, 22 times that of 2015.
During the interview, Zhang Xia pointed out that since 2018, foreign capital has continued to allocate a shares, and the northward capital has contributed more than 300 billion incremental capital to A-Shares every year on average. With the expansion of foreign ownership, its marginal impact on the A-share market has also increased.
He believes that the proportion of public and private funds in the market trading volume has also increased. The change of market trading structure reflects the change of A-share investor structure.
In recent years, with the entry of foreign capital, public offering, private placement and other institutional funds into the market, the institutionalized proportion of A-Shares has increased steadily. At present, the proportion of institutions in the free circulation market value has reached nearly half of the level, and the ecological environment of A-Shares has improved day by day. Enhancing the attraction to foreign capital, pension and other medium and long-term institutions is of great significance to the stable development of the stock market, It is conducive to the formation of benign interaction between the primary and secondary markets.
The reporter also found that, unlike the previous sharp rise in the stock market, individual investors flocked to the market, and the rise of major market indexes has not been prominent since this year. According to Gui Haoming’s analysis, in terms of the market pattern during the year, “track stocks” and other very active stocks accounted for a large part of the market transactions. The amplification of trading volume is not a balanced situation, showing “inequality between the rich and the poor”. Of course, this is also the characteristic of the structural market.
GUI Haoming believes that a large number of transactions during the year did not appear in large cap stocks, and the rise of such stocks did not contribute much to the rise of the market index. On the contrary, the performance of heavyweight stocks such as banks and real estate was not active during the year, so they could not stimulate the overall situation of the market.
The amplitude of reached a record low in the year
It is worth noting that while the market trading volume is enlarged, the fluctuation range of the two cities this year is very small, and the “chronic disease” of the overall sharp rise and fall of the market in the past is being improved. To some extent, this reflects the transformation of market investor structure and trading composition.
The data show that since the beginning of 2021, the amplitude of the Shanghai stock index is only over 12%, which is lower than that of the Shanghai stock index in any previous year.
If there is no huge fluctuation in the next two trading days, the amplitude of the Shanghai index this year will be the lowest in history.
In previous years, the lowest amplitude was in 2017, when the amplitude of the Shanghai composite index was 13.98%. In 2015, which was close to the turnover of the two cities this year, the amplitude of the Shanghai index was as high as 71.95%.
The data also show that the year with the highest amplitude in the history of Shanghai stock index is mainly concentrated in the 1990s, and the amplitude has gradually narrowed in recent years, reflecting the gradual narrowing of market fluctuations in recent years. However, although the overall volatility of the market has decreased significantly, it does not mean the lack of market opportunities. The differentiation between different industries is also increasing, and the performance of plates and individual stocks is closer to the fundamentals.
(Securities Times)
