International Index Expansion A-Share Temporary Cautions Become Foreign Countries Still Long-Term Optimistic for Chinese Economy

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  Original Title International Index Expansion Limit A Share Temporary Announcement Foreign Countries Still Long-term Optimistic about the Chinese Economy Wang Youruo ○ Editor Sun Fang In the evening of February 21, Beijing time, the well-known index compiling company FTSE Russell announced its flagship index February quarter 2020Adjust the results.

This quarterly adjustment will increase the division factor of A shares from 15% to 25% as scheduled, while 88 new A shares will be allocated.

  According to the arrangement, this year’s MSCI, FTSE Russell and other international indexes’ expansion of A shares will improve, and the passive incremental funds brought by this may also be accompanied by corresponding responses.

However, some institutions expect that active funds from overseas this year are still expected to continue to deploy A shares.

A few foreign institutions have flat expectations for China’s economic development, and believe that some industries within the short term will be affected by the epidemic. However, the resilience of the Chinese economy will continue, and we will see a rebound this year.

  Expansion of A-shares temporarily cautions the first-stage announcement that the FTSE Russell flagship index and FTSE Global Equity Index series this time replaced 88 A-shares, of which 10 were A-shares, 7 were A-shares, and 67 were A-shares.Only, there are 4 A shares in the micro-disk.

The 53 selected stocks of the Air Force are reclassified based on the latest market value changes.

Only one stock of Yongyi was excluded from micro-cap stocks.

  The above changes became effective after the close on March 20 at the beginning of the year, which also means that the passive allocation of funds following the index can be completed before March 20.

Following the FTSE Russell metabolism process, it adjusted the above list slightly according to market conditions (such as the adjustment of the Shanghai and Shenzhen Stock Exchange Standards), and finally named the list as an index to reflect the determination a few days ago.

  After this round of quarterly adjustments is completed, FTSE Russell will fully complete its plan to divide the first phase of A shares.

And in November 2019, another major index giant MSCI has completed the “three steps” to expand A shares.

This also means that the expansion of international index companies for A shares will improve.

  Regarding whether to consider further expansion of A-shares in the future, FTSE Russell Crystal once told the Shanghai Stock Exchange that further expansion of A-shares in the future will become the completion of the first phase of the transformation and the market’s progress in promoting foreign investors to enter the Chinese market.

FTSE Russell is concerned about a series of issues such as QFII / RQFII bond settlement, the increase of the maximum foreign exchange shareholding ratio, the increase in the scope of stocks covered by interoperability, and the Shanghai-Shenzhen-Hong Kong Stock Connect holiday coordination arrangement.

In addition, we need to observe the superfluity of offshore RMB and so on.

  Active capital plans continue to be deployed. Even if this year’s international index companies expand their A-shares, the pace of affluent “buy” A-shares has slowed.

As of February 21, as the main channel for foreigners to enter A-shares, the Shanghai-Shenzhen Stock Connect has gradually net inflows to 793 this year.

150,000 yuan, accounting for the highest net inflow last year (3517.

4.3 billion) of 22.

55%.

  Although the passive allocation of funds brought about by the expansion of the index has improved, some institutions expect that active funds from overseas in 2020 will promote the continued deployment of A shares.

  The latest position of Bridgewater Fund, the world’s largest hedge fund, shows that it again slightly increased positions in two US-listed Chinese ETFs in the fourth quarter of last year.

At the same time, overseas funds that manage billions of dollars have also quietly landed on A shares.

A well-known private equity fundraiser in Shenzhen disclosed that at the end of 2019, he personally went to battle to make a roadshow for a company’s huge overseas sovereign wealth fund. The 北京夜生活网 fund plans to invest US $ 3 billion in the A-share market in succession and is choosing the right mainland.Private placement as investment advisor.

  Liu Mingchen, head of China strategy at UBS Securities Investment Research, said that unless it is assumed that MSCI’s A-share split factor will not increase in 2020, its overseas active funds transferred to A-shares are also expected to reach $ 300 billion.

  The epidemic situation does not change China’s economic development trend. Continuous investment in A shares reflects the strong foreign interest and confidence in China’s stock market and the Chinese economy.

  After the new crown pneumonia outbreak, FTSE Russell quickly said that the expansion of the third part of the A-share segment originally scheduled for March this year will proceed as scheduled and will not be damaged.

  MSCI China research director Wei Zhen told the media that overseas investors generally commented on the timely opening of the A-share market after the Spring Festival. Its research team also found that unless it was affected by the epidemic, A-shares were suspended for the first time as in 2015.This phenomenon reflects the continuous maturity of the market.

  At the same time, the permanent foreign investment institutions made it clear that the epidemic had only a short-term impact on A shares, and it just brought a good opportunity to buy high-quality companies.

  The strategy team of Tianfeng Securities believes that at present, the share ratio of holders of mutual funds such as JP Morgan Chase and Puxin is still smaller than the allocation ratio of A shares in international indexes such as MSCI.

Therefore, the short-term or even international index is not increased by the proportion of A shares, and the high profitability and return advantage of some high-quality assets of A shares will also attract more overseas active mutual funds to continue to increase the allocation of A shares.

  In the eyes of the supreme people, the estimated level of blue chip stocks of A shares is already in a value depression.

After encountering unexpected bad news, the safety margin of blue chip stocks has been further enlarged.

At the same time, China ‘s capital market has been further opened to the outside world, making it easier for foreign investors to invest and trade in stocks and related securities markets.