In June, foreign capital entered the market and global capital increased the allocation of Chinese assets

Recently, northward capital has accelerated to flow into the A-share market. As of June 8, northbound capital had net bought for 8 consecutive trading days, breaking the record of continuous net buying time this year. Since June, northbound capital has net bought a total of 2659billion yuan, more than the whole month of May. After a short period of fluctuations, the rhythm of overseas capital investment in the A-share market is gradually returning to a stable level. Institutions generally believe that in the medium and long term, the allocation of foreign capital to RMB assets will continue to grow.
Net purchase of northbound funds for 8 consecutive days
On June 8, the three major indexes ended up in shock, and northbound funds continued to keep net buying. The net buying on that day totaled 5.767 billion yuan, including 6.317 billion yuan for Shanghai Stock connect and 550 million yuan for Shenzhen Stock connect. As of the same day, northbound capital had made net purchases for 8 consecutive trading days, breaking the time record of continuous net purchases this year.
Since late May, with the recovery of the market, northbound funds have also accelerated to enter the market. According to wind data, on May 20 and May 31 this year, northbound funds made substantial net purchases of 14.236 billion yuan and 13.865 billion yuan respectively, the two largest single day net purchases this year.
In terms of investment, since May, northbound capital has continuously increased its positions in power equipment, electronics, chemical industry and other industries. According to wind data, since the beginning of May, the five industries with the largest changes in the market value of northbound capital holdings are power equipment, electronics, chemical industry, mechanical equipment and automobile, with an increase of more than 10 billion yuan. Among them, the largest change in the market value of Power Equipment Holdings, with a total increase of more than 68 billion yuan, and power equipment is also the industry with the highest market value of northbound capital holdings at present.
From the perspective of the whole year, although the northward capital fluctuated greatly, it still showed a net buying trend as a whole. According to statistics, in the first six months of this year, except April, northbound funds were net purchases in a single month. Among them, the net purchases in April, may and June showed an increasing trend, reaching 6.3 billion yuan, 16.867 billion yuan and 26.059 billion yuan respectively. It is worth noting that although five trading days have just passed in June, the monthly net purchase amount of northbound funds has exceeded that of the whole month of May.
Liujinjin, chief China equity strategist of Goldman Sachs, and his strategy team predict that the profits of listed companies will stabilize and recover in the second half of the year. Among them, the third quarter earnings per share is expected to achieve a year-on-year growth of about 4%. Nomura Securities also recently issued a research opinion that a shares have been supported by valuation, and economic growth and corporate profits are expected to recover in the second half of the year.

The active management ETFs under the US asset management giant capital group recently increased their positions in a number of Chinese stocks. Previously, Allianz China A-share fund, the largest overseas Chinese equity fund, increased its positions in Ningde times and Longji green energy by 6.02% and 27.02% respectively in April. Allianz omnidirectional China Equity Fund, another Chinese Equity Fund under Allianz investment, significantly increased its holdings of Chinese Internet companies including Tencent holdings, Alibaba, jd.com and other Chinese Internet companies in April. In addition, the fund also significantly increased its holdings of Ningde times.

Overseas asset management giants accelerate the layout of China
Recently, a series of policies have been issued to promote the high-level two-way opening of the capital market, from the incorporation of ETFs into the interconnection to the support of overseas institutions to set up fund management companies.
On May 27, the China Securities Regulatory Commission and the Hong Kong Securities Regulatory Commission jointly announced that in order to further deepen the trading interconnection mechanism between the mainland and Hong Kong stock markets and promote the common development of the two capital markets, they agreed in principle that the two exchanges would include qualified ETFs into the interconnection.
With the continuous improvement of the opening level of China's capital market, overseas asset management giants have also accelerated their layout in the Chinese market.
Recently, another foreign-funded giant completed private placement filing. According to the website of China Securities Investment Fund Industry Association, AXA private equity fund management (Shanghai) Co., Ltd., a wholly foreign-owned enterprise, recently completed the filing and registration of private equity fund managers. The company's shareholder is AXA Group, one of the world's largest financial and insurance groups. Since the first foreign-funded private placement was registered in january2017, more than 30 foreign-funded private equity fund managers have completed the registration. According to incomplete statistics, the scale of assets under management of foreign private placement has reached 58.5 billion yuan, a record high.
The agency said that under the background of continuous promotion of system reform, medium - and long-term foreign capital will continue to flow into a shares. Haitong Securities' strategy team believes that at present, the proportion of a shares in the global portfolio is still very low. In 2021, China's GDP will account for 18% of the world, and in 2020, the market value of A-share listed companies will account for 13% of the global capital market, while the weight of a shares in MSCI acwi global market index is only about 0.4%, so there is a lot of room for improvement in the future. From the position of large investment institutions around the world, the proportion of Chinese Listed Companies in their stock portfolios also has room for improvement. It is expected that in the future, with the rapid increase of the importance of China's economy in the world, foreign capital will continue to flow into a shares in the medium and long term.