More than expected! A share will attract huge amount of overseas funds? The Land Hong Kong Stock Connect has quadrupled, the Shanghai Luntong Stock Connect is planned to be launched within the year, and there is also a wave of MSCI theme funds to accelerate the issuance!
Securities Times
Ruan Runsheng
With the rapid development of A-share internationalization, the global asset allocation pattern will change.
Following the expansion of China's index products by MSCI (Mingsheng Company) in March to prepare for the inclusion of A-shares in the index, the central bank and the CSRC simultaneously announced on April 11 that the interconnection market will be further upgraded. On the one hand, the daily quota will be quadrupled, and on the other hand, it will strive to open the Shanghai Luntong in 2018.
Simultaneous voice of mainland supervision
On April 11, Yi Gang, President of the People's Bank of China, said at the "Normalization of Monetary Policy" sub forum of the Boao Forum for Asia that in order to further improve the mechanism of interconnection between the mainland and Hong Kong stock markets, the daily quota of interconnection will be quadrupled from May 1 this year. In addition, we are striving to open Shanghai Luntong in 2018, and the opening measures of some financial and service industries announced earlier are also advancing in an orderly manner.
In response, the CSRC and the Hong Kong Securities Regulatory Commission issued a joint announcement on the adjustment of the quota:
Gao Li, spokesman of the CSRC, said in answer to questions from reporters:
Since the launch of the Shanghai Shenzhen Hong Kong Stock Connect, the overall operation has been stable and orderly, and the daily quota arrangement has played an important role in ensuring the stable operation of the market. In order to improve the interconnection mechanism between the mainland and Hong Kong stock markets, and steadily expand the two-way opening of capital markets, the securities regulatory commissions of the two places agreed to expand the daily quota of interconnection, adjusting the daily quota of Shanghai Stock Connect and Shenzhen Stock Connect to 52 billion yuan respectively, and the daily quota of Hong Kong Stock Connect under Shanghai Hong Kong Connect and Shenzhen Hong Kong Stock Connect to 42 billion yuan respectively. This expanded opening up initiative will help long-term overseas institutional investors to participate in the A-share market and maintain the safe and stable operation of the market.
In the next step, the regulatory authorities of the two places will continue to strengthen cross-border capital flow monitoring and regulatory cooperation, accelerate the implementation of transparent transaction regulatory arrangements, effectively ensure the smooth operation of the interconnection mechanism, and promote the common prosperity and development of the two markets.
Shenzhen Stock Exchange said that according to the Joint Announcement of the Securities and Futures Commission of the China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission issued by the two securities regulatory commissions on April 11, 2018, the daily quota of the Shenzhen Hong Kong Stock Connect was adjusted from RMB 10.5 billion to RMB 42 billion, and took effect from May 1.
According to the website of the Shanghai Stock Exchange, the 2018 annual meeting of the Boao Forum for Asia announced that it would strive to open the interconnection between the Shanghai Stock Exchange and the London Stock Exchange stock markets ("Shanghai Luntong") in 2018. Shanghai Stock Exchange will strictly implement the spirit of General Secretary Xi Jinping's speech on opening up, unswervingly promote the reform and opening up of the capital market in the new era in accordance with the decisions and deployment of the CSRC, and ensure the timely preparation of relevant business rules and systems of "Shanghai Luntong".
Ou Dali, chief executive of the Hong Kong Securities Regulatory Commission, said that the expansion of the daily quota would facilitate investors' access to the Hong Kong and mainland stock markets. Chen Delin, President of the Hong Kong Monetary Authority, said that the expansion of the daily quota would further enhance the flow and certainty of transactions, and would also help ensure that the MSCI emerging market index was included in A-shares smoothly this year. Li Xiaojia, Chief Executive Officer of the Hong Kong Stock Exchange Group, said that he welcomed the mainland and Hong Kong regulators' announcement today to expand the daily quota of the Shanghai Hong Kong Stock Connect and Shenzhen Hong Kong Stock Connect, which responded to many changing market demands in a timely manner.
As for Shanghai Luntong, the spokesman of the CSRC said that it would work together with the British side to open it in 2018. In the next step, the CSRC will unswervingly promote the opening of the capital market and create a new pattern of mutually beneficial and win-win international cooperation in accordance with the decisions and arrangements of the CPC Central Committee and the State Council.
Previously, in January, Li Xiaojia, CEO of HKEx, said at the annual media luncheon that HKEx was preparing an innovation laboratory, and the "London Hong Kong Link" might be opened in 2019.
Limit reopening
Under the Shanghai Shenzhen Hong Kong Stock Connect mechanism, the openness of two-way trading lines is gradually upgrading.
According to the data, the total quota under the Shanghai Hong Kong Stock Connect has been cancelled since August 16, 2016, while the Shenzhen Hong Kong Stock Connect does not set a total quota. At present, the daily quota of funds going north is 13 billion yuan, and the daily quota of funds going south is 10.5 billion yuan. The daily quota is calculated on the basis of "net purchase". Based on this principle, investors can sell cross-border securities or input cancellation order requirements at any time, regardless of the amount balance.
From the perspective of A-share internationalization process, it is a general trend to further liberalize the quota.
Liang Haorong, a financial strategy analyst at Tian Yuan in Hong Kong, told the reporter of E Company that according to the current path, A-shares are expected to be included in the MSCI emerging market index in two stages starting this year, and will be completed at the initial inclusion factor of 2.5% and 5% respectively.
Based on the current market data, it is estimated that there is about 1.6 trillion dollars of capital calculated on the basis of MSCI emerging market index. After A-shares are included in the stock market, the initial inclusion weight is 0.73%, which is expected to attract overseas capital inflows of more than 10 billion dollars in the short term.
In the long run, when A-shares are fully included, it is estimated that A-shares account for more than 10% of the MSCI emerging market index, and the international capital that can be attracted is expected to be 100 billion dollars.
In addition, MSCI also mentioned that if the daily quota is abolished or significantly increased, it is not ruled out that A-shares will be included in MSCI once and for all. If the quota is increased, the influence of A-share in the international financial market will be enhanced again, and it will bring significant changes to the global capital allocation and investment pattern.
Ma Jun, General Manager of Shuanglong Investment, said in an interview with the media that from the perspective of the process of the South Korean and Taiwan markets being included in the MSCI Index, both the capital and style had limited impact at the initial stage, and the subsequent impact would depend on relevant supporting policies, such as foreign exchange control. There is no doubt that the inclusion of A-shares in MSCI is beneficial to the A-share market in the long run. The impact on A-share is more the stabilization of investment style and rationalization of valuation, which will be a long process.
Domestic and foreign capital actively responded
According to Wind statistics, since its opening, the Shanghai Hong Kong Stock Connect and Shenzhen Hong Kong Stock Connect have respectively attracted 218.2 billion yuan and 182.4 billion yuan of A-shares, presenting a situation of "hot in the south and cold in the north" as a whole.
In the first quarter of this year, the major A-share indexes showed differentiation. The Shanghai and Shenzhen indexes closed down, while the GEM rose 8.43% and returned to 1900 points, the largest quarterly increase in two years. In April, the Shanghai Composite Index strengthened again, and the connectivity market was also extremely active.
According to the statistics of E Company, in the first quarter, a total of 42.2 billion yuan was net purchased by funds from Shanghai and Shenzhen to Hong Kong, of which 9.7 billion yuan was net purchased by funds from the north in March, and 10.5 billion yuan was net purchased by funds from the south, with the turnover slightly increasing month on month. Among them, the GEM's average shareholding ratio grew fastest.
From the perspective of industry distribution, the liquor and pharmaceutical industries have become the focus of additional positions. Since this year, Shanghai and Shenzhen Stock Connect have increased their holdings of Shenwan Liquor Exchange Target by about 8.5 billion yuan. As a leading liquor enterprise, Guizhou Moutai The latest shareholding ratio has returned to a high of 6% again. In addition, funds from Beishang Shuijingfang The proportion of shares has exceeded that of Guizhou Moutai, reaching 7.69%.
However, household appliance leading stocks were significantly "shipped" in March, and they were cautious about the market hyped "unicorn concept stocks".
As for the layout strategy before A-share was formally incorporated into MSCI Index, Bai Haifeng, Director of International Business Department of China Merchants Fund and Executive Director and General Manager of China Merchants Asset Management (Hong Kong) Co., Ltd., said recently in the exchange activity that investors need to desalinate the formal contents such as style rotation of stocks in large and small sizes, industry rotation, concept speculation, hot pursuit, etc, Focus on companies that can really achieve predictable performance growth and long-term growth. In the financial and consumer sectors, some targets that benefit from the upgrading of consumption, as well as the improvement of industry concentration under strict supervision and deleveraging in the financial sector will be significantly favorable, and this year all have the opportunity to achieve absolute returns.
Recently, the issuance rhythm of MSCI theme funds has significantly accelerated, the time between the announcement date of fund issuance and the approval of the fund has shortened, and the number of approved related products has exploded. According to the CSRC, as of the end of March, 14 fund companies had applied for 23 MSCI theme funds.
Sina statement: This message is reproduced from Sina's cooperative media. The purpose of posting this article on Sina.com is to convey more information, and does not mean to agree with its views or confirm its description. The content of this article is for reference only and does not constitute investment advice. Investors operate accordingly at their own risk.
Editor in charge: Zhang Haiying
