Original title: Northbound funds set multiple records in 2021, and 2022 is expected to continue to flow into A shares. Source: China Securities Journal·China Securities Network
Choice data shows that the cumulative net inflow of northbound funds in 2021 is 432.169 billion yuan, a record annual net inflow. Among them, the net inflow of Shanghai Stock Connect funds is 193.727 billion yuan, and the net inflow of Shenzhen Stock Connect funds is 238.442 billion yuan. In 2021, the amount of Northbound funds to increase positions in the power equipment, electronics, and banking industries is the top; the number of shares held in 1,165 stocks increases, of which the amount of increase in positions in the Ningde era is the largest.
Analysts said that northbound funds are already one of the main sources of funds in the A-share market. On the whole, in 2021, Northbound funds will reduce their holdings of consumer stocks and lay out the new energy track, which reflects their preference in industry allocation. Looking forward to 2022, it has become a consensus in the market to continue to allocate A shares to Northbound funds.
Floating loss of 11.4 billion yuan in 2021
Specifically, Choice data shows that in December 2021, the net inflow of northbound funds was 88.992 billion yuan, a record monthly net inflow; the single-week net inflow from December 6 to December 12, 2021 was 48.834 billion yuan, a weekly net inflow. The inflow to a record high; May 25, 2021, the net inflow was 21.723 billion yuan, a record single-day net inflow. Northbound funds will show a net inflow in each month of 2021, of which the net inflow in April, May and December exceeded 50 billion yuan.
From the perspective of northbound capital holdings, Choice data shows that as of the end of 2021, the market value of northbound capital holdings was 2.76 trillion yuan. In 2021, the market value of northbound capital holdings increased by 420.8 billion yuan, combined with the net inflow of northbound funds in 2021 of 432.169 billion yuan. The floating loss is about 11.4 billion yuan.
The number of shares held by Northbound Funds at the beginning of 2021 was 2,262, and as of the end of 2021, its shareholding increased to 2,422. In 2021, 160 stocks newly included in the Shanghai Stock Connect and Shenzhen Stock Connect will be increased by Northbound funds.
Under the background of the general correction of core assets in 2021, the top ten major stocks of northbound funds have undergone tremendous changes. As of the end of 2021, the top ten major stocks of northbound funds are Kweichow Moutai, CATL, Midea Group, China Merchants Bank, Longji, Wuliangye, China Freedom, Mindray Medical, Yili, and Yangtze Power. Among them, Longi, Mindray Medical, Yili, and Yangtze Power have newly entered the top ten major stocks. In 2021, the number of shares held by Northbound Funds in these stocks will be 318 million shares, 365.183 million shares, 184 million shares, and 400 million shares, respectively. .
Judging from the situation of northbound capital increase in the industry in 2021, Wind data shows that based on the changes in stock holdings and the average transaction price of individual stocks, in 2021, northbound capital will increase positions in 25 industries and reduce positions in 6 industries. Among them, power equipment is the industry with the largest amount of northbound funds to increase warehouses, reaching 124.651 billion yuan. At the same time, the power equipment industry is also the industry with the largest increase in 2021; food and beverage is the industry with the largest amount of northbound capital to reduce warehouses, reaching 14.953 billion yuan. In the case of a large increase in northbound funds in the power equipment industry in 2021, the power equipment industry has replaced the food and beverage industry and has become the largest industry for northbound funds by the end of 2021, and food and beverage is the second largest industry for northbound funds.
The Ningde era
From the perspective of the changes in the shareholdings of Northbound Funds, Choice data shows that in 2021 Northbound Funds’ holdings in 1,165 stocks will increase, excluding the stocks that have newly entered Shanghai and Shenzhen Stock Connect in 2021, and the holdings of 65 stocks will increase. With more than 100 million shares, Zijin Mining, which has the largest increase in its holdings, increased its shareholding by 775 million shares, and its holdings in Oriental Fortune and Sanhua Zhikong increased by 537 million shares and 529 million shares respectively.
Nearly 1,000 stocks will be lightened by Northbound funds in 2021. Choice data shows that in 2021, Northbound funds will lighten up a total of 989 stocks, of which 21 stocks will lighten up more than 100 million shares. BOE A, which has the largest number of shares to lighten up, was lightened by 678 million shares, while Gree Electric and Zoomlion were lightened by 4.66 shares and 403 million shares respectively.
In addition, Choice data shows that in 2021, 160 stocks newly included in the Shanghai and Shenzhen Stock Connect will be increased by Northbound funds. Among them, China Energy Construction, China CRSC, and Three Gorges Energy will be increased by 154 million shares, 8311113 million shares, and 66,383,100 shares respectively in 2021.
In terms of the amount of increase or decrease in holdings, Wind data shows that based on the changes in holdings and the average transaction price of individual stocks, in 2021, the amount of increase in the holdings of Ningde Times, Longji and China Merchants Bank by Northbound Funds is the top, with net purchases of 34.858 billion yuan. , 27.732 billion yuan, 22.906 billion yuan. In addition, the amount of holdings of Inovance Technology also exceeded 22 billion yuan. In 2021, most of the top ten stocks in the top ten in the amount of northbound fund holdings rose, and the largest increase was in the Ningde era. In 2021, the amount of northbound capital reduction in Kweichow Moutai, Gree Electric, and Hikvision is the top, with net sales of 28.221 billion yuan, 19.874 billion yuan and 13.919 billion yuan respectively. In 2021, most of the top ten stocks in the amount of northbound fund reductions fell, with Ping An of China the largest decliner, which fell by 40% in 2021.
Continue to increase the allotment of A shares has become a consensus
Regarding the trend of northbound funds in 2022, brokerage agencies generally stated that northbound funds will continue to flow into A shares on a large scale.
According to Zhang Qiyao, chief strategy analyst at Industrial Securities, on the one hand, the opening of the capital market continues to deepen, and A shares have higher valuations and cost-effectiveness, and they are independent of US stocks. The proportion of foreign capital in A shares is still low. Multiple factors will drive the north. Capital continued to flow into A shares. On the other hand, the Fed may start an interest rate hike cycle in 2022, which will have an impact on global capital flows (especially trading orders) and the RMB exchange rate. Therefore, it is expected that foreign capital inflows in 2022 may be marginally slower than in 2021. It is estimated that the net inflow of northbound capital in 2022 will be 336 billion yuan.
Qin Peijing, chief strategy analyst at CITIC Securities, said that the current allocation ratio of overseas equity funds in A shares is still low.
CICC stated that the annual net inflow of foreign capital into A shares in 2022 may reach 200 billion to 400 billion yuan.
Goldman Sachs Chief China Equity Strategist Liu Jinjin said that it is estimated that about 75 billion US dollars of northbound capital will flow into A shares in 2022. Under the expectation that the net inflow of northbound capital will continue to increase and the allocation of household assets will gradually shift to the stock market, the market will have ample liquidity. Stocks generate strong driving force.
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