Shareholders eat “soil”, Moutai continues to be reduced

Shareholders eat "soil", Moutai continues to be reduced
The Central Meteorological Station issued a sandstorm warning upgraded news, 12 provinces and cities in the north have a large range of yellow sand, but also eat the soil of the entire stock market. Yesterday, the two stock indexes started lower, Shanghai index once pulled up in the red, closed just managed to hold 3400 points, down 0.96%, the Shenzhen Component Index fell sharply to 3.62% in the afternoon, the end of the decline narrowed to 2.71%, Shenzhen ChiNext Index fell 4.09%. Moutai lost another 2000 points, and the index fell 4.48%.

The greenness of the stock market, which had been on a downward trend last week, reversed itself on Monday, instantly reminiscent of the grueling opening day after the Lunar New Year holiday. Although the market rally did not continue, the northbound buying did not turn.

Northward funds continue to add positions in finance, traditional industries, reducing consumption

According to Wind data, northbound funds bought a net 3.688 billion yuan yesterday, the fifth consecutive day of net inflows, bringing the cumulative inflows of 18.890 billion yuan in the past five trading days. From the week dimension, northward funds to buy the most stocks for China Merchants Bank, Longji shares, Tongwei shares. China Ping An, Sunshine Power, Wanhua Chemical, Wuliangye, BYD also received more than 1 billion capital inflows.


In 2020, northward funds will mainly allocate cycle manufacturing, TMT and medicine with growth attributes, and reduce the holdings of large consumption sectors. CITIC Securities found that before the Spring Festival in 2021, northbound funds continued the main allocation of the previous year and began to allocate more traditional cyclical sectors in the upper and middle reaches, which benefited from rising industrial commodity prices.

After the Spring Festival in 2021 (from February 18 to March 10), the allocation of financial real estate and traditional cycle industries will be increased, and the TMT industry will reduce its holdings, while continuing to reduce its holdings of food, beverage and optional consumption.

From the recent 7 trading days of northfacing capital trends, it continues to add positions in finance (China Merchants Bank, Ping An China), traditional cycle industries (chemical, media, cement), and further reduce holdings of big consumer leaders led by Kweichow Moutai, Midea Group, Kangming Pharmaceutical King.


Image from: WIND, as of March 15, the northward movement of funds in the past seven days

The history of the fund heavy warehouse strong stocks after a sharp fall

If we try to explore how the market will be interpreted after the sharp fall of the strong stocks in the fund from the historical data, the research team (Xunyugen team of Haitong Securities, the first place in the research of new wealth strategy in 2020) found that the sharp fall of the stocks in the fund often appears in the middle and late period of the bull market, but this does not mean the end of the bull market.

Historically, 07 years Q1 and 14 years Q4 belong to have appeared the fund heavy warehouse stocks fell sharply, the cold stocks up the situation. In particular, the adjustment in Q1 in 2007 was due to a shift in monetary policy (with a similar background to the recent market decline caused by liquidity concerns). After February 2007, small market capitalization stocks represented by CSI 1000 rose rapidly, with a rise of more than 20% in the whole month of February. Most of the fund’s heavy positions fell by more than 30%, but then the market still reached a new high.

From their research, 2007 Q1, 14 Q4, the whole is a sharp fall – rebound – ramming the bottom of the adjustment of the process of gathering momentum. In the first quarter of 2007, the CSI 300 had a maximum decline of 19.1%, which was about a 20-day deep correction. In the Q4 adjustment of 2014, the CSI 300 had a maximum decline of 17.8%.

In the process, market styles have actually been rebalanced. That is to say, the early rise of the plate in this process experienced valuation adjustment, early by “cold” industry shows the bull market in the make-up. But the market did not cool off completely.

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