Under geopolitical fluctuations: Global foreign capital outflows from the US, South Water significantly buys Hong Kong stocks | Guotai Haitong Investor Microbehavior Insights Manual, March Issue 2

（Source: Yi Guan Market Outlook）

Author: Fang Yi / Guo Yinhan / Tian Kaixuan

Core viewpoint: This period’s market trading activity cooled down, while the profitability effect edged up. From the funding side, financing capital saw a slight inflow; the marginal issuance of actively managed mutual funds tilted higher; ETF capital saw a slight outflow; and foreign capital flowed out of A-shares and Hong Kong stocks.

Summary

▶ Market pricing status: Market trading activity declined, while the profitability effect edged up. 1）Market sentiment (down): This period’s market turnover rate fell; the average daily trading value for all A-shares dropped to 2.5 trillion; the number of daily limit-up boards fell to 65.4; the maximum consecutive limit-up count was 4.5 boards; the limit-up success rate fell to 70.0%; and the number of stocks appearing on the Dragon & Tiger榜 (Top List) was 51. 2）Profitability effect (up): This period’s proportion of stocks rising increased to 34.9%; the weekly return median of all A-share stocks rose to -1.2%. 3）Trading concentration (up): Both first-level and second-level industry trading concentration increased. The number of industries with turnover rate historical percentiles at or above 90% reached 10 this period. Among them, four industries such as oil & gas and coal had turnover rates at or above 99%.

▶ A-share capital flows: Financing capital saw a slight inflow this period, while ETF capital saw a slight outflow. 1）Public funds: This period’s newly issued size of equity-focused funds rose to 22.62 billion; the overall equity allocation of public funds decreased. 2）Private funds: In March, the private fund confidence index fell by 0.1% versus February; positions edged up versus the prior period (as of 3/6). 3）Foreign capital: Outflow of 1.04 billion USD (as of 3/11); the historical percentile (MA5) of northbound capital’s trading share fell to 24.5%. 4）Industrial capital: This period’s IPO initial offering raised 290 million yuan; the size of placements/targeted issuances was 1.15 billion yuan; and the unblocking scale of restricted shares in the next period is expected to be 26.79 billion yuan. 5）ETFs: Passive capital flowed from inflow to outflow; ETF outflow this period was 15.11 billion yuan; the passive trading share decreased quarter-on-quarter to 5.8%; and industry trading concentration CR5 increased versus the prior period. 6）Financing: Net purchases rose to 18.28 billion yuan this period; and the trading value share rose to 9.5%. 7）Retail investors: Alternative indicators show retail investor activity edged up.

▶ A-share industry allocation: There are clear divergences among foreign capital, financing capital, and ETF capital. 1）Foreign capital: (as of 3/11) Most first-level industries saw outflows. Net outflows leading included Electronics (-160.4 million USD) / Power Equipment, and Banks (-91.7 million USD). 2）Financing: (as of 3/12) Power Equipment (+6.05 billion yuan) / Basic Chemical (+4.07 billion yuan) saw leading net inflows; Nonferrous Metals (-4.04 billion yuan) / Defense & Military Industry (-1.22 billion yuan) saw leading net outflows. 3）ETFs: At the industry level, passive capital shows a net outflow trend. Utilities (+2.61 billion yuan) had the leading net inflow; Oil & Gas & Petroleum & Chemical (-4.15 billion yuan) / Biopharma (-2.15 billion yuan) had leading net outflows. In second-level industries, Power / Grid Equipment saw the leading net inflow, while Refining & Trading / Batteries saw leading net outflows this period. ETFs that led in additional holdings this period include Grid Equipment ETF / Power ETF, etc.; and the leaders in financing net purchases include E fund/富国政金债ETF? and Bosera? (富国政金债ETF / 博时可转债ETF融资净买入居前). Venture Board ETF and CSI 300 ETF led in net redemptions, while Hang Seng Tech ETF led in financing net sales. 4）Dragon & Tiger榜 funds: Environmental protection, Basic Chemical, and Computer were the top three industries on the Dragon & Tiger榜.

▶ Hong Kong stocks and global capital flows: Southbound capital surged in, while global foreign capital edged in to the Japan market and the Korea market. This period, the Nasdaq index closed down -1.3%; major global markets all fell across the board; and Indonesia’s Composite Index (-5.9%) led the decline. Capital dimension: 1）Southbound net buying increased to 52.44 billion yuan, reaching the 96th percentile since 2022 (MA5). 2）This period (as of 3/11), net fund flows from developed markets for active/passive strategies were -9.908 billion yuan / 21.207 billion USD; for emerging markets, active/passive net flows were -2.248 billion yuan / 4.152 billion USD. Looking only from the foreign-capital definition, global foreign capital’s marginal inflow went mainly to Japan and Korea; Japan (+1.57 billion USD) and Korea (+2.57 billion USD) were the top inflow destinations by scale. Looking at overall global flows including domestic capital from each country/region, Japan and Korea were the top recipients. Global non-US and Japan funds saw an increase in net subscriptions, with net subscriptions for US stock energy/industrial funds leading.

▶ Risk warning: There is a risk of bias in the data statistics methodology; errors in the data estimations; and bias risk in data learned from third-party institutions.

Disclaimer

Cathay Haitong Strategy Team

A massive amount of information and precise interpretation—right here in the Sina Finance APP