North Capital To Raise Funds To Raise "Core Assets" Frequently Hit A New High, Private Refusal To Catch Up With Public Offerings Advocating "Performance Is King"

A shares shake up the bottom stage, and foreign capital returns sharply.

"Recently, foreign capital has returned to A shares again, which is related to the stabilization of the surrounding market. Foreign capital comes in, mainly to raise some core assets. " Zhao Lisong, chairman of upper German Valley investment, said.

From the perspective of capital flows, the focus of foreign investment is still blue chip white horse stocks, mainly concentrated in consumer stocks, and some technology stocks. And with the swarms of capital, some A shares' core assets' share prices have recently reached a record high.

The timing here is also quite subtle. This is the time when MSCI released its 2020 May semi annual index examination results, while FTSE Russell will expand A shares in June 20th.

When the open door continues to open, is the core asset of continuing high innovation still worth buying?

The share price of some A share core assets has reached a new high in recent years. Map Vision China

Core assets

In May 12th, the northern capital has been inflows for 3 consecutive days, with a net inflow of 7 billion 255 million yuan since May, compared with a net inflow of up to 53 billion 358 million yuan in April.

It is worth mentioning that the northward capital has a large net outflow of 67 billion 873 million yuan from the record of March, and has since gone back sharply to return to the A share market.

"It is still the initial stage of foreign capital inflow. From a global perspective, the Chinese market is hard to ignore in terms of economic growth or asset allocation. China has the world's second largest stock and bond market, and the lower valuation, greater policy space and relatively stable economic fundamentals of the Chinese market are the main reasons for the long term exposure of the Chinese market. Kami Mane pointed out.

The recent acceleration of foreign investment in A shares is still the core asset of A shares.

Publicly available data show that the ten top positions in A shares are Guizhou Moutai, Midea Group, China Ping An, GREE electric appliances, Heng Rui medicine, Wuliangye, China Merchants Bank, conch cement, China International Travel Service, and Changjiang Electric Power Company.

"From the past month's inflow of foreign capital, the largest stocks with net buying amount are Guizhou Moutai, Midea Group, Wuliangye, GREE electric appliance, and pharmacy, etc.", mainly focusing on large consumption sectors: liquor, household appliances, medicine and so on. In May 12th, Zhang Ting, senior macroeconomic analyst at the research center, said.

"Foreign investment pays much attention to long-term value investment, and large influx of stocks are often good fundamentals. From the top 10 stocks of foreign capital inflows, they are almost all white horse stocks. Yang Delong, chief economist of Qianhai open source fund, pointed out.

"However, it is worth noting that apart from white horse stocks, foreign capital is still scramble to raise some technology stocks: 5G, chips and semiconductor leading shares. However, overall, the proportion of foreign capital allocation is mainly white horse stocks, and technology stocks account for a relatively small proportion. Yang Delong said.

Twenty-first Century economic news reporter noted that in addition to consumer stocks, technology leading shares, the recent north capital sweep cargo also includes more and more attention to the infrastructure sector.

In the early morning of May 12th, the Hong Kong Stock Exchange's central clearing holding records showed that more than a few stocks from the traditional infrastructure sector were attacked by capital in the north.

In May 11th, Xugong machinery was granted 35 million 289 thousand and 500 shares in the north, and the margin was 7.37%. On the same day, North purchased 219 million yuan of net capital, accounting for 20% of the total turnover of Xugong's machinery 1 billion 815 million yuan. This led to a 7.95% increase in the share price of Xugong on the same day.

The sweeping phenomenon of foreign capital is not a case. After foreign capital returned to A shares in March, the stock prices of frantic sweeps, such as Guizhou Moutai, Wuliangye and other recent stock prices, have also reached a record high.

This trend is still continuing. In May 12th, Heng Rui pharmaceuticals bought a net capital of 468 million yuan in the north, and the US group and Guizhou Moutai received a net purchase of 244 million yuan and 238 million yuan respectively.

"Recently, foreign capital has been flowing into A share medicine consumption Core Company, and some stock prices have reached a new high. From the historical valuation range of some pharmaceutical consumption Core Company, it has been in the historical valuation interval of 8 or more, or even close to 10. Yi Bo investment fund manager Wang Yanglin said.

In this regard, Wang Yanglin suggested that investors prudently intervene, conditional investors may even consider the layout of short positions.

Whether domestic institutions follow up

Then, when the valuation of the core assets of A shares substantially increased, will the domestic investment institutions follow up?

"Foreign investment is common or medium to long term. When it uses valuation or through some calculations, it is not important for them to recognize the price of the core asset stocks at present, especially the problem of high and low share prices." Zhao Lisong said.

"Due to the period of our holdings and the different judgments and foreign investments in individual stocks, we have different operations with foreign capital. In the near future, we are gradually reducing our positions. Zhao Lisong said, "after the two sessions are over, look at the extent of the drop and consider the opening."

Li Kejie, general manager of the Hong Kong Private Equity Fund, also said that he would not pursue the core assets of high foreign investment.

It said, "the core asset of foreign capital allocation has risen quite a lot, so we do not pursue it. But now is the time to configure core assets that have not been allocated to foreign capital, such as some leading companies, especially state-controlled listed companies, which have irreplaceable positions in the industry, such as financial industry, petrochemical industry and so on.

Han Ming, general manager of Xingda investment department, holds similar views.

It said, "the core assets of foreign capital continue to flow in recent years. Some stock prices have been very high. We do not have to rush to raise funds, we can wait for the callbacks to intervene again. Foreign investors buy these core assets, many of which are passive investments and asset allocation needs.

He said that the two quarter is the stage of the global epidemic and economic loss. The end of the Chinese economy is in the recovery stage, while Western Europe and southern Europe are still in the stage of easing the epidemic and restart the economic stage. Trade negotiations are also uncertain. The market will also be volatile. It is best to maintain a reasonable position and choose investment targets that are not related to these profits or reverse the performance.

While public fund managers say that they can not catch up with their core assets, they must follow the principle of "performance is king".

A public fund manager said that the outbreak made asset differentiation fiercely, especially the core assets represented by pharmaceutical companies. The share prices of domestic electronics companies, including innovation, were also rising. "Valuations are not cheap, but the existence is reasonable, depending on the subsequent performance of these core asset stocks".

"Now institutional positions are more similar, basically consumer, medicine, electronics, computer assets and so on, these types of warehouse trend is the most obvious. The public offering fund has been maintained at a relatively high position this year, and there is no way to reduce the position. Follow up, because the overall economic downturn this year, ultimately depends on the company's performance. The fund manager said.