On March 14, there was a significant net outflow of funds from the north again.
On the same day, the three major A-share indexes opened low and went low. As of the close, the Shanghai Composite Index fell 2.6% to 322353 points; The Shenzhen composite index fell 3.08% to 1206363 points; The gem index fell 3.56% to 257045.
The net outflow of northbound funds continued to be substantial, with a net outflow of 14.408 billion yuan as of the closing, including 7.268 billion yuan in Shanghai and 7.141 billion yuan in Shenzhen. This is the net sale of northbound funds for six consecutive trading days, totaling 50.729 billion yuan. Less than three months later in 2022, northbound funds have sold more than 10 billion yuan a day for the fourth time, compared with only five times in 2021.
So far, in the 10 trading days since March, the net outflow of funds from the North has been 48.501 billion yuan, including 21.919 billion yuan from the Shanghai stock market and 26.582 billion yuan from the Shenzhen stock market.
China Industrial Securities Co.Ltd(601377) chief strategist Zhang Qiyao pointed out that since this year, foreign capital has actively arranged the steady growth direction of banks and continued to sell the consumption and pharmaceutical sectors. As of March 11, this year’s northward capital mainly flowed into banks, non-ferrous metals and power equipment industries, and mainly flowed out of pharmaceutical and biological, food and beverage and household appliances industries. In addition, northbound funds also significantly increased their marginal holdings in related industries with steady growth, such as public utilities, transportation, architectural decoration and real estate. According to the types of funds, the trading directions of the allocation disk and the trading disk are roughly the same in various industries, but there are differences in power equipment, agriculture, forestry, animal husbandry and fishery, media, electronics and non bank finance. The allocation disk increases its holdings and the trading disk decreases its holdings.
Specifically, today, only Luxshare Precision Industry Co.Ltd(002475) ( Luxshare Precision Industry Co.Ltd(002475) ) and Muyuan Foods Co.Ltd(002714) ( Muyuan Foods Co.Ltd(002714) ) have received net capital inflows to the north, which are 288 million yuan and 209 million yuan respectively.
Kweichow Moutai Co.Ltd(600519) ( Kweichow Moutai Co.Ltd(600519) ), China Tourism Group Duty Free Corporation Limited(601888) ( China Tourism Group Duty Free Corporation Limited(601888) ) and China stock market news ( East Money Information Co.Ltd(300059) ) were sold net of 1.556 billion yuan, 801 million yuan and 667 million yuan respectively.
Why does foreign capital “grow money” continue to have a net outflow recently?
Zhang Qiyao believes that the recent sharp outflow of funds from the north is due to factors such as increased volatility in overseas markets and the continued hawks of the Federal Reserve caused by stagflation risk. On the other hand, more importantly, geopolitical risks and the intensification of confrontation and game between major powers under the recent conflict between Russia and Ukraine may become the root cause of the sharp outflow of foreign capital and overseas “long money”.
“In view of the uncertain conflict between Russia and Ukraine, the increased risk of stagflation and the continuous tightening of global liquidity, foreign capital is still facing fluctuations in the short term.” Zhang Qiyao said that in the medium and long term, under the background of high real interest rate difference between China and the United States, resilient RMB exchange rate, China’s sustained and stable fundamentals and investment environment, the inflow of foreign capital into A-Shares is still a long-term trend.
