Ouyang XiaohongNo one expected that after the A-share "Balianyang" pressed the pause button, a sky-high and falling ** followed.
On February 28, the three major A-share indexes all fell, and the Shanghai Composite Index fell 191%, and the Shenzhen Component Index fell 240%, the GEM index fell 251%。Although the market correction is not unexpected, the daily turnover of 1,371.6 billion yuan is quite rare.
On the same day, it was rumored in the market that "the relaxation of restrictions related to quantitative trading has led to the expansion of trading volume"; Another view is that this day is the February 2024 ETF (exchange-traded index**) options delivery day, which does not rule out the delivery effect of ETF options that "sell-off pressure causes the market to plummet".
Judging from the disk structure of this day, in the process, the "special valuation" and the brokerage sector have not been shaken, but the main battlefield of quantitative trading, the micro-cap stock index, has exceeded 9% - the reason for the approximate "crash" may also be that some quantitative funds are selling a large number of stop-losses?
On February 29, the three major A-share stock indexes turned to collectively rise, and the Shanghai Composite Index regained the 3,000-point mark to close at 3,01517（+1.94%), the Shenzhen Stock Exchange Component Index and the ChiNext Index closed respectively03（+3.32%), the trading volume of the two cities was 1,052.7 billion yuan, and more than 5,200 northbound funds were net 1660.4 billion yuan.
In this way, after the daily turnover of 1,371.6 billion yuan, is the market looking for a new balance point in the long and short game between the big fall and the big rise?
one
A review of the significant volatility of A-shares on February 28 will see that the major indices rose and retreated, and then turned down, with the ChiNext Index and the Shanghai Composite Index performing particularly well. What is the market logic behind the adjustment of the sky?
In the market volatility of the day, artificial meat concept stocks led the gains, and sectors such as energy metals, education, pharmaceuticals, diversified finance and photovoltaic equipment also performed relatively well.
Sectors such as micro-cap stocks, robotic actuators, automotive thermal management, and consumer electronics led the decline, which may be related to market concerns about the short-term growth or profitability of these industries.
February 28 is also the delivery date for ETF options and the A50 stock index**. A few days ago, some market participants warned that "ETF options need to be careful about the risk of volume adjustment on the delivery date".
The sharp drop in market volume caused by the delivery date of ETF options is the result of a combination of factors, including market participants' rebalancing behavior, hedging needs, trading volume, market sentiment and leverage effect.
The turnover of the day exceeded 13 trillion yuan, becoming the first explosion in the year of the dragon, showing the high participation of the market. The number of transactions often means that the market has reached a critical point to some extent, which may be due to a large number of buyers and sellers playing at this ** level. On the one hand, the explosion may be a process for the market to find a new balance; On the other hand, it may also be a release of market sentiment.
Looking at the DMA business associated with micro-cap stocks, its trading allows for easier execution of algorithmic trading and high-frequency trading (HFT) strategies, which often involve a large number of quick buying and selling operations. While this can increase market liquidity, it can also increase market volatility in certain situations. In extreme cases, this high-speed trading can drive **swift** in a very short period of time, i.e. it may lead to *** in some cases
On February 28, the spokesperson of the China Securities Regulatory Commission answered a reporter's question on "there are reports on the tightening of private equity DMA business", pointing out that DMA is a market-neutral strategy transaction carried out by private equity ** and ** company, and private equity ** long chooses a basket**, and at the same time uses stock index ** hedging to obtain hedged stock selection income. In the early stage, due to strategic reasons, private equity ** showed a partial net value drawdown in the process of market fluctuations, and **companies and private placements** took the initiative to strengthen risk prevention and control, steadily reduced leverage and scale, and the risk was digested to a certain extent.
In the next step, the China Securities Regulatory Commission will continue to strengthen the supervision and improve the system for DMA and other OTC derivatives business, guide the industry to control the scale and leverage of the business, severely crack down on violations of laws and regulations, and maintain the smooth operation of the market.
Another piece of news is that on the evening of February 28, the CFFEX issued a notice: "Recently, the CFFEX has imposed disciplinary sanctions on the management and actual controller of Shanghai Weiwan Private Equity for failing to declare the actual control relationship account in accordance with the regulations, violating the exchange trading limit system, and exceeding the trading limit on multiple varieties of stock indexes." ”
On the same day, the spokesperson of the China Securities Regulatory Commission (CSRC) answered reporters' questions on the disciplinary measures taken by CFFEX.
The China Securities Regulatory Commission (CSRC) said that recently, CFFEX has taken regulatory measures against relevant customers for violating the management of accounts with the actual control relationship of the ** market, which is a measure to fulfill the regulatory duties of the exchange. The China Securities Regulatory Commission (CSRC) has always adhered to the main tone of strict supervision, guided the first exchange and the CFFEX to strengthen the linkage of futures and spot supervision, penetrated the supervision of various trading behaviors, including high-frequency trading, and severely cracked down on market violations in accordance with laws and regulations. In the next step, the China Securities Regulatory Commission will continue to thoroughly implement the spirit of the first financial work conference, comprehensively strengthen supervision, and effectively ensure the stable and healthy operation of the market.
II. II. II
In the ebb and flow of A-shares, the flow of different funds also interprets their different investment strategies and styles.
It is worth noting that despite the volatility in the market, on February 28, there was a net outflow of 7372.6 billion yuan, but the northbound capital bucked the trend of net inflow, with a net **13 on the same day400 million yuan, net **122 this week7.5 billion yuan. In the past 5 days, 10 days, and 30 days, they were net **1587.2 billion yuan, 2523.9 billion yuan, 3948.8 billion yuan.
On February 29, the net inflow of northbound funds was 1660.3 billion yuan, a net **288 this week7.9 billion yuan. Lithography machine (+9.)07%), SMIC Concept (6.).81%), hydrogen energy (+6.27%), humanoid machines (+5.96%). From the perspective of the industry, electronic chemicals, semiconductors and components all rose by more than 6%.
According to the analysis of CITIC**, since January 2024, the flow of overseas funds to the A** market has shown obvious differentiation, among which the funds entrusted to domestic and Hong Kong-funded institutions have bucked the trend of net inflows, and the allocation of foreign capital has gradually recovered moderate net inflows, while the recent two-way fluctuations of transactional foreign capital have been significantly amplified.
For example, the cumulative scale of transactional foreign capital has reached the historical limit: the cumulative scale of transactional foreign capital has reached the historical limit since August last year, but it has recently rebounded to a certain extent. The net outflow trend of allocated foreign capital since August 2023 has eased, and it has recently begun to slightly "make up" the gap of the previous withdrawal. In this case, it may be necessary to continue to pay attention to the recovery of fundamentals. The strength and sustainability of the replenishment of allocated foreign capital will depend on changes in expectations for the recovery of domestic fundamentals. If the domestic economic data is good, it may attract more allocation of foreign capital to return. In addition, overseas active ** may adjust to China**: Given that the active ** China ** has fallen to a lower level, it may be adjusted in the future according to the performance of the Chinese market and changes in the global economic environment.
So, is foreign capital tempted? Chen Zhiqiang, Chief Investment Officer, Allianz Global Investors Asia Pacific**, said: "There are regional differences in valuations in Asia, but they are generally at a reasonable level. U.S. interest rates may have peaked, providing favorable conditions for interest rate policy outlook and monetary stability across the region. Given the diversity of factors and opportunities driving the performance of Asian** markets and sectors, this highlights the importance of tailoring investment strategies to market characteristics. ”
Allianz Global Investors believes that China** valuations have been downgraded over the past three years due to structural and cyclical economic headwinds. Valuations in China are already at low levels and are expected to stabilize when signs of macroeconomic improvement become more apparent. Recent policy actions should provide good support to the macro environment in the near term and help boost sentiment.
However, addressing the property downturn is critical to market recovery. In addition, China's transition to an innovation-led economy will play an important role in the long-term development of its economy. It is important to note that the current negative perception of China does not take into account some of the factors that will drive China's long-term economic growth, and adopting a bottom-up strategy is key to identifying attractive investment opportunities in China**.
It is true that, as Allianz Global Investors has argued, valuations in China** are already at low levels, and recent policy actions are expected to provide support in the near term. The key is to address the real estate downturn and economic transformation.
Allianz Global Investors believes that "solving the real estate downturn and achieving economic transformation" is a complex process that requires multi-faceted efforts and strategies. Strong economic fundamentals, aggressive reforms, well-developed infrastructure, favorable demographics, and a relatively stable political situation will bring new growth opportunities to Asia and attract significant capital inflows.
As China continues its structural transformation to a higher-quality economic growth model, Allianz Global Investors said that some companies that can respond to the adjustment of market expectations and adapt to the "new normal" will continue to survive. For Chinese real estate, investors should now look to the "survivors" of the worst credit downturn in the industry's history, as key policy measures are introduced to curb further deterioration in liquidity.
Allianz Global Investors believes that the Asian market offers diversified investment opportunities through proactive investment strategies and in-depth market analysis in the context of the current global economic challenges. Especially in the ** and fixed income markets, it seems that Asia is entering a multi-year virtuous cycle that portends potential investment returns.
Is that so? Another good news for A-shares is that recently, the semi-annual review report of the global ** index released by the British FTSE Russell Index Company pointed out that 76 new A-shares were transferred in, and one ** was transferred out, and at the same time, it was arranged to increase the inclusion factor of newly transferred A-shares to 25% in March 2024, which will take effect on March 4, 2024.
In this regard, some market analysts believe that the adjustment of index constituents is more reflected in the ** level, and the passive ** tracking index may allocate more funds for the newly included **, which will bring a certain amount of incremental funds to the ** transferred into the index; The excluded** may face outflows. Currently, there are about $20 trillion in investment assets benchmarked against FTSE Russell index products.
Winter is coming to spring, the Year of the Dragon has arrived, will the A-shares in March also usher in spring?
For investors, the key is not whether they can ** the market, but whether they are ready for market changes. Staying calm, paying attention to policy trends, and rationally analyzing market fundamentals will be the only way to seize opportunities. Perhaps, now is the best time to lay out? In the midst of unpredictability, every fluctuation may contain new opportunities.
Either way, the market is looking forward to a corrected spring. The "pause button" pressed after the "Eight Consecutive Yangs" - whether this is a deep breath of the market or the "volume clearing" of some quantitative funds, a deep adjustment may bring a new balance to the market.