Last week was the last trading week of the A-share market in 2021. The overall market performance was stable and the risk appetite rebounded. Among them, the science and innovation index performed well, and the cycle and growth style led the two cities again. On the whole, the market style has changed rapidly since the fourth quarter, and the characteristics of stock game are obvious.
In 2021, A-share incremental funds flowed in significantly, and the turnover exceeded the bull market level in 2015 on the basis of stable turnover rate throughout the year. Under the trend of accelerating the entry of residents’ wealth into the market and the increasing attraction of A-Shares to foreign capital, it is expected that the average daily turnover of trillion is expected to become the new normal of the market in the future.
In the whole year of 2021, the net purchase of northbound funds exceeded 432 billion yuan, a record of net inflow since the opening of land stock connect, and a new monthly net inflow in December. The attraction of A-Shares to foreign capital has been increasing. The capital going north continues to maintain a high net inflow after the short-term disturbance, which is in line with our judgment that “real investment is not afraid of false foreign capital disturbance”. Deconstruct the industry distribution of northbound capital inflows throughout the year. Electrical equipment, chemical industry, electronics, banking and computers are the sectors with the largest net purchases. In particular, the net inflow of electrical equipment exceeds 100 billion. This year, northbound capital continues to favor the science and technology growth sector.
Since its opening, northbound capital has been one of the most important incremental funds in the A-share market. From the perspective of historical income, it has a good performance. There are more and more institutions tracking “smart money” in the market. Last year, due to frequent market rotation and poor matching of style, the yield of funds going north was poor. Under the condition of record net inflow, the overall floating loss was nearly 34 billion yuan.
However, from the perspective of industries with marginal inflow and continuous trend inflow, China has maintained a good income: the floating profit of funds going north in the electrical equipment sector is nearly 100 billion, the floating profit of the top three industries with net inflow of electrical equipment + chemical + electronics exceeded 145 billion yuan last year, and the floating loss of the three industries with heavy positions of food and beverage + medicine and biology + household appliances exceeded 136 billion yuan.
According to the recent data, since December, under the expectation of loose liquidity, the marginal inflow of land stock connect has been scientific and technological growth, big finance and food and beverage, and the plate allocation is more balanced. The capital allocation to the north is “big manufacturing” + “big consumption”. Our allocation ideas for the future market do not coincide:
We expect that in the downward phase of the economic cycle, the focus of A-share allocation will gradually tilt to the “middle and lower reaches”. The improvement of supply-demand relationship will lead to the profit recovery of the middle and lower reaches of the industry with the downward inflation. At the same time, with the weakening of the kinetic energy of economic growth, it is expected that the policy support will take care of the economy. Focus on the middle and downstream industry sectors benefiting from the narrowing of ppi-cpi scissors and the expected warming of Chen interest rate. On the one hand, recently, many ministries and commissions have intensively released the 14th five year plan for the science and technology industry, and the policy has obvious intention to protect the sustainable development of high-end manufacturing industry; On the other hand, with steady growth, boosting consumption and stimulating domestic demand is expected to become an important starting point.
