Declassification of “Northbound Funds”: Late Attacks, Why Are They Backward?
CITIC Securities in-depth decryption of “Northbound Funds”!Sneak attack in late game, chase up and down, and hit bottom, why are they all? Source: China Fund News A-share investors often find that when the mainland capital is still in fear and panic, the capital of the north will always set off a wave of “buy, buy and buy” god operation, shocking the market. In the buying action of Kitakami funds, sneak attacks in late trading, huge purchases, and chase ups and downs frequently occur. The play and style are very similar, and each time, it is possible to accurately copy Kitakami funds to the bottom.More surprisingly, no matter whether it is A-share king Maotai or other blue-chip white horse bull stocks, there is always a figure of northbound funds behind it. This also makes some investors lament that “the capital of the north can always bet on the market”, “it is right to follow the capital of the north!!!”. So, what is the buying logic behind Kitakami Capital?Why is the method of going north to capital so psychedelic, but it can always follow the rhythm of the market? A few days ago, the latest report of CITIC Securities’ strategic research, combined with its 8 million pieces of custody data, analyzed the composition and behavior of the funds from the north.Behind this is the unique behavior of this financial force that stirred the market. What exactly is the Northbound Fund?May wish to take a look with Fund Jun. Analyze 8 million escrow data bills and securities brokers to break through the northbound capital structure. For A-share investors, the buying logic and position operations of northbound funds are becoming the vane of the market rhythm over the past year.The behavioral rules behind the funds to go north will inevitably become a topic that too many market people are keen to discuss. A few days ago, CITIC Securities Research launched a new research report on its WeChat public account, analyzing the accumulated data of more than 8 million historical northbound funds custodian banks, penetrating the structure of northbound funds, and found thatThe behavioral characteristics behind it. In the research of CITIC Securities, they found that there are significant differences in the trading behavior of different types of custodian 深圳桑拿网 institutions, distinguishing the different types of investors behind them, leading to the analysis of the buying logic of Beijing Capital on different sectors in different periods.CITIC Securities said that through the construction of the “transaction increment coefficient”, “ROE coefficient” and “market value coefficient” can be tailored, there are some characteristics and rules for Beishang capital from different custody institutions. For example, in terms of renewed transactions, restructuring, the northbound funds deposited with securities firms are obviously more alternatives than transactions held with banks.The trading limit coefficient of Kitakami funds deposited with securities companies is about 117 times that of Kitakami funds deposited with banks, while the former’s stock size accounts for only about 39% of it. At the same time, the funds entrusted to domestic and Hong Kong-based securities firms are significantly more active than similar foreign institutions.The calculation results of the exchange rate coefficient of the transaction show that the transaction coefficients of the capital of Beishang Fund, which is held in domestic and Hong Kong capital, have reached 3 respectively.512 and 1.481, which is 17 times and 7 times the funds deposited in the north of foreign institutions. This also means that the turnover rate of Kitakami funds is higher than that of institutional investors as we traditionally define.Especially in the composition of funds for the north, domestic and Hong Kong funds enter the mainland market through Hong Kong channels. It naturally carries the investment style of “chasing up and down” and “changing positions” in the A-share market.To some extent, it also explains why there is a short-term transaction in the northward capital, and the characteristics of the conversion of stocks and shares are converted. According to CITIC’s research and analysis, the higher turnover rate of Kitakami’s funds is mainly derived from customers who are hosted by foreign brokers, which may include some conversion transactions of hedge funds, accounting for about 26 of Kitakami’s funds.3%. Late raids became a customary way to buy large amounts of funds from the north. Due to the high-frequency trading frequency of the funds from the north, their ability to stir the market was also enlarged.Judging from the past market performance, whenever there is news that foreign countries have a positive interest in A shares to increase positions, the drama of late raids on the northward capital will frequently be staged. For example, at the end of September 20th, the net inflow of funds to the north expanded rapidly to 30 billion yuan, triggering the last three minutes of the pulse of the A-share market. On the same day, the closing time on September 20 (before the opening on September 23) was the time when the FTSE Russell A-share capacity expansion arrangement would be implemented.At the same time, the S & P Dow Jones Indices Corporation ‘s S & P Emerging Markets Global Benchmark Index A-share expansion arrangement will also take effect on September 23. Market analysts pointed out that the passive funds of the two major indexes need to complete the construction of positions before the close of September 20, which has also become an important driving factor for the crazy sweeping of funds in the late north. In fact, such a late-stage raid is already a routine operation for the northbound capital. On May 28, the Shanghai and Shenzhen markets rushed higher and lowered. The three major indexes turned green, and the market sentiment was once sluggish.In just a few minutes of the round-trip auction, the index suddenly experienced a violent pull. And the financial strength to complete this masterpiece is also northward funding.The data shows that the expected receipts, the northbound funds changed significantly in the late trading, once a net inflow of over 11 billion, on May 28 consecutive day A-share closing net inflow of nearly 7.5 billion US dollars.The net inflow of Shanghai Stock Connect was 59.3.2 billion yuan, Shenzhen Stock Connect net inflow of 15.5.9 billion yuan.This means that in the last few minutes, Northbound funds bought more than 5.6 billion yuan. The reason for triggering a crazy sweep of funds from the north is also similar, that is, the index fund MSC representing incremental incremental funds will complete the expansion. The replacement factor for the Chinese large-cap A-share market will be replaced by 5% to 10%, and closed on May 28.After strength. From the perspective of the day’s market, the newly-divided GEM stocks of the newly divided MSCI index have all experienced late-stage pull ups to varying degrees. Lepu Medical, Aier Ophthalmology, Flush, Mindray Medical, Ningde Times, Zhifei Biological, Wen’s StockNewly replaced GEM stocks such as Tiger Pharmaceuticals, Lansi Technology, Kangtai Bio, Watson Bio, Oriental Fortune, Pioneer Intelligence, Netsu Technology, Songcheng Performing Arts, Mango Super Media, Sanhuan Group, Huichuan Technology, etc.The tail was pulled up to varying degrees. The heavy-value blue-chip white horse’s “value investment” logic highlights the fact that some of the performance targets and good-performing blue-chip white horse stocks in Beihang Fund’s holding targets often become the heavy stock targets for Beihang Fund.This feature is also an important aspect observed in the CITIC Securities research. According to the research of CITIC Securities, it is significantly easier to deploy high-ROE companies to fund Beishang funds deposited with foreign banks.The data shows that the ROE of the holders of Kitakami funds held in foreign, domestic and Hong Kong-funded banks increased by 18 according to the proportion of positions held.5%, 18.0%, 14%, while the average REE of stocks held in foreign, domestic and Hong Kong-funded brokerage firms is 17.9%, 14.2%, 14.3%. At the same time, the expected average ROE of stocks held in foreign banks is mainly distributed at 17.30% to 20.Between 63%, the average ROE of stocks escrowd by foreign brokers is mainly distributed at 16.98% to 19.53%, while the average ROE of the stocks that are escrowed in domestic-funded institutions (banks / brokers) is mainly distributed at 11.81%?19.35%. On the whole, the northbound funds entrusted to foreign banks have obvious characteristics of “long-term holding” and “value investment”, accounting for about 68% of northbound funds, which is more conducive to the analysis of rich long-term logic. Data show that from the perspective of the top ten stocks held by the Shanghai-Shenzhen Stock Connect, Northbound funds are more inclined to big consumption, big finance and big medicine.Among them, Guizhou Moutai, Ping An of China, Hengrui Medicine, Midea Group, Gree Electric and other super large white horse stocks have become the key companies for the northward distribution of funds. Take Moutai, Guizhou as an example. Since November last year, Moutai, Guizhou has been rising, and the capital of the north has continued to buy. The pace of purchase and the intensified situation are almost synchronized. On October 15, Guizhou Moutai continued to grow against the trend, reaching a peak of 1215.68 yuan, the market value exceeded 1.5 trillion yuan, an increase of 103% during the year.This also makes the northward capital that constantly buys Maotai become the biggest winner of this round of kings. According to statistics, by the end of 2015, Beijing Capital has held 69 million shares, corresponding to a market value of 15 billion yuan. In four years, the value of this part of the stock market has soared to 76.8 billion yuan, with a net profit of 61.8 billion and a yield of over 400%. Too many institutional investors lament that in the current transaction of some blue-chip stocks, the proportion of foreign exchange continues to increase, and even some additional holding stocks dominate the trend of individual stocks. Such a trend will become increasingly apparent in the future. Foreign countries also love the “hype theme” pseudo-foreign share of actual expenditure. In addition to accurately buying mainstream Northbound funds of value bull stocks, this time CITIC Securities also used the data of escrow brokers to discover the buying characteristics of other institutions, that is, andA-share retail investors have the same investment style. There are also some funds from the north who like to speculate on the theme, chasing gains and losses.There is no doubt that the “pseudo-foreign” forces hotly debated in the market are hidden. According to the above-mentioned CITIC Securities research, Kitakami funds with obvious thematic speculative transactions are mostly hosted by domestic-funded brokers, and their transaction exchange rate is about that of Kitakami funds that are held by foreign banks and brokers.3 times. In fact, there are obvious differences in the industry allocation behavior of different types of institutions’ Beijing Capital. This is precisely the fact that Beijing Capital’s participation in the conference is a blue-chip white horse, which will also help small industries or theme-type industries. The data shows that in the past year, the allocation of Beishang Funds hosted by domestic-funded institutions to the TMT sector has been more obvious.The scale of TMT assets held by Beijing-funded funds held by domestic brokerages held less than a quarter of the funds held by foreign-invested investment banks a year ago.Close to Mainland investors. In this wave, the market is called “pseudo foreign”. Some foreign institutional analysts said that the northbound funds themselves are not necessarily all foreign exchange, and some of them are indeed funded or leveraged to enter the mainland.At the same time, if some stocks rise too quickly, long-term funds themselves will adjust their positions by reducing holdings, which also causes some stocks to be pulled or traded by northbound funds. However, some funding is not the main force of northbound funding.The above-mentioned CITIC Securities research also stated that the size of the “pseudo-foreign” market concerns is estimated at less than half of 5%. It may be that from the past, the long-term trend of capital going north is still in a net inflow situation.Data show that since the launch of the Shanghai-Shenzhen Stock Connect, Northbound funds have been in a state of continuous buying.Since October, the net purchase of Beijing Capital has reached 24.6 billion US dollars, and the net purchase of Beijing Capital has reached 210.9 billion yuan this year. According to foreign institutional investment managers, the current estimates of the A-share market are still attractive to foreign exchange, and the performance of many blue-chip white horse stocks has been determined. In the long term, it is worth giving a higher valuation.”Currently, A-shares are still significantly underweight in the global market, which also means that the foreign share will continue to increase.As China’s financial policies become more open, more and more foreign countries will actively enter China’s A-share market and bond market.”