The Shanghai Composite Index fell 3.87% as of June 28, falling for the second consecutive month since May, ending the continuous rise in February, March and April. In the process of falling in the stock market, foreign capital (northbound funds) continued to flow out, financing funds continued to flow out, and ETF funds continued to dip in.
In June, foreign investors continued to smash A-shares, while A-share funds continued to flow out of A-shares and into Hong Kong stocks
Since June, the cumulative net outflow of northbound funds has reached a significant scale of 44.4 billion yuan, and the historical cumulative net buying volume has hit a new low since early March. It can be said that the outflow of foreign capital has significantly reduced market confidence, because foreign capital has always been regarded as smart money, and the outflow of foreign capital has caused other funds to follow suit and smash the market, resulting in a continuous decline in the stock market.
It is worth noting that on Friday, northbound funds bought for the first time since the beginning of June, changing the previous action of continuous smashing, which may mean that foreign capital has begun to enter the market on dips, which may mean that there is little room for continued decline in the short term, because if it continues to fall, foreign capital is likely to re-buy on a net basis.
Northbound funds refer to foreign speculation in A-shares, while southbound funds refer to mainland funds speculating in Hong Kong stocks. From the beginning of the year to the end of June, the net purchase of Hong Kong stocks by southbound funds reached more than 350 billion yuan, which means that nearly 350 billion yuan of funds have given up A-shares in the past six months, and they have continued to buy Hong Kong stocks from the A-share market, which is obviously not conducive to A-shares. With the reduction of funds in A-shares, it is difficult for A-shares to rise. If we can see a sharp decline in southbound funds, it may mean that mainland funds have begun to flow back to A-shares, and that is the signal that A-shares are about to rise for a long time.
Due to the expectation of RMB depreciation, mainland funds have a strong incentive to flow into the Hong Kong dollar market, including the Hong Kong dollar stock market, and at least avoid a certain amount of RMB depreciation.
In mid-to-late June, the financing market also continued to smash
Compared with the northbound capital outflow of 44.4 billion yuan in June, the financing market smashed 32.8 billion yuan, which is also an important force for shorting. In fact, the financing balance has fallen overall since the beginning of the 3rd balance, reflecting that the bullish sentiment is not high. From the beginning of March to the end of June, the financing volume decreased by nearly 50 billion yuan, that is to say, after the rise in February and March, leveraged funds did not continue to choose to be bullish but chose to settle down. Compared to the low point of financing funds in early February, there seems to be room for the financing balance to decline. It is not ruled out that the risk of continuous decline due to the stop loss of financing orders will continue to occur in the later period.
In the process of the stock market falling in June, securities lending was declining, and the short-selling power was weakening
Since the beginning of June, the stock market has fallen from 6.685 billion shares to 6.013 billion shares, and the volume of securities lending has decreased by nearly 10%.
In June, ETF funds continued to buy the bottom of index funds during the decline of A-shares
The largest CSI 1000 ETF fund, the fund share of the CSI 1000 ETF fund, has continued to buy the bottom and increase its position in the process of continuous decline since the end of May, and the fund share has increased from about 11.2 billion shares to 11.89 billion shares on June 28, an increase of nearly 5%, but compared with the fund share in early May, the fund still has a lot of outflows, reflecting the willingness of funds to buy the CSI 1000 so far, but it is not strong. In fact, this part of the ETF fund that bought the bottom has been trapped. Before the fund's continued decline in May, the fund's share had already fallen sharply, and smart money had already flowed out of the CSI 1000 in late April and early May. It shows that the sharp decrease in the fund's share has a certain warning effect on the decline of the index, but the recent continuous increase in the fund's share has not brought about the rise of the index.
Huatai Pineapple CSI 300 ETF fund is the largest CSI 300 ETF fund, the fund's share has increased significantly since June 20, from more than 56 billion to the current 60.32 billion, significantly higher than the peak of the fund share at the end of April, and the fund share increased by nearly 7% in just one week, indicating that after the index fell, the willingness of the long-term bottom-buying index fund increased.
The SSE 50 fund has continued to increase its holdings since mid-May and has been increasing its holdings until mid-June, but after the index continued to fall in late June, the SSE 50 fund continued to redeem, and the fund share fell significantly, indicating that some ETF fund investors chose to cut their meat and stop the market.
summary
At the same time, mainland funds have been abandoning the A-share market, and the inflow of Hong Kong stock market has become a long-term unfavorable factor for A-shares. Securities lending was originally a short-selling tool, but in the stock market decline in June, securities lending not only did not short-sell, but instead reduced the amount of short-selling, which is equivalent to becoming a long-term force. In the decline of the stock market, ETFs are constantly buying the bottom, but it has not brought about the rise of the stock market, and the ETF bottom-buying funds are constantly being trapped. Although the ETF dip means that the bullish force is increasing, it does not mean that the decline is over, because the ETF is a long-term fund and is not sensitive to short-term fluctuations.