Foreign institutions are using "real money" to buy high-quality Chinese assets.
Recently, with the strong inflow of foreign capital, foreign capital trends have been regarded as "investment vanes" by investors. Since May, a number of listed companies have announced buyback announcements showing that foreign giants have continued to increase their positions in Chinese assets. In addition, with the disclosure of the first quarterly report of listed companies, the latest trends of QFII funds have also surfaced. A reporter from the China Securities Journal found that sovereign wealth funds such as the Middle East tyrant Abu Dhabi Investment Authority and the Kuwait Government Investment Authority are increasing their holdings of A-share listed companies through QFII channels.
In addition, Deutsche Bank, Goldman Sachs, UBS and many other foreign institutions have raised their forecasts for China's economic growth in 2024. While giving a "vote of confidence" to China's economy, foreign institutions also expressed optimism about investment opportunities in China's financial and capital markets.
Foreign-funded institutions continue to sweep goods
Recently, a number of listed companies have announced buybacks, compared with the end of the first quarter, JPMorgan Chase (J.P. Morgan), Merrill Lynch International and many other foreign-funded institutions have increased their weight in A-share listed companies.
On May 14, Hongchuan Wisdom announced that as of May 9, the number of shares held by J.P. Morgan was 19,909,800 shares. According to the first quarterly report, as of the end of the first quarter, the number of shares held by J.P. Morgan was 19.0733 million shares.
According to public information, Hongchuan Wisdom mainly provides comprehensive warehousing services and other related services for domestic and foreign petrochemical product manufacturers, traders and end users. The business mainly includes terminal storage tank integrated services, chemical warehouse integrated services, transit and other services, logistics chain management services and value-added services.
ON MAY 8, FANTUO DIGITAL INNOVATION REPURCHASED THE ANNOUNCEMENT THAT AS OF MAY 6, MERRILL LYNCH INTERNATIONAL (MERRILL LYNCH INTERNATIONAL) AND BARCLAYS BANK PLC (BARCLAYS BANK) BECAME ITS TOP TEN CIRCULATING SHAREHOLDERS, HOLDING ABOUT 695,800 SHARES AND 624,000 SHARES RESPECTIVELY. According to the first quarterly report of Fantuo Digital, the above two foreign-funded institutions did not appear in the company's top ten circulating shareholders.
According to public information, Fantuo Digital is a digital creative technology enterprise, committed to digital multimedia display services and cutting-edge technology exploration and research, providing customers with integrated digital display services, including 3D digital content production, VR/AR display, etc., and its business scope covers industrial real estate, parks, commercial complexes and other fields.
Well-known sovereign wealth funds continue to increase their weight
The movements of sovereign wealth funds are seen as one of the important windows into foreign investment. According to Global SWF, a global sovereign wealth fund data platform, half of the world's top 10 sovereign wealth funds in 2023 are from the Middle East: Abu Dhabi Investment Authority (ADIA), Kuwait Government Investment Authority (KIA), Saudi Public Investment Fund (PIF), Qatar Investment Authority (QIA) and Government Investment Corporation of Dubai (ICD).
In the case of the Abu Dhabi Investment Authority, for example, the layout of the institution is very broad. According to Wind data, at the end of the first quarter of 2024, ADIA appeared in the list of the top ten circulating shareholders of 27 A-share companies, with a total market value of about 11.289 billion yuan, an increase of more than 1 billion yuan from the end of 2023.
From the perspective of individual stocks, Wind data shows that compared with the end of last year, ADIA increased its position in many listed companies such as Tonghua Dongbao, Hongfa Shares, Wanfu Biotechnology, Jianxingyuan, Huafon Chemical, Jin Chengxin, and Haid Group in the first quarter. Among them, the number of additional positions in Tonghua Dongbao and Hongfa shares exceeded 2 million shares. In addition, ADIA has also added to the list of the top ten circulating shareholders of 8 companies, such as BOE A, Beauty Beauty, Electric Power Research Institute, etc.
Another Middle Eastern sovereign wealth fund, the Kuwait Government Investment Authority, has an equally extensive investment in China. According to Wind data, at the end of the first quarter of 2024, the Kuwait Government Investment Authority appeared in the list of the top 10 outstanding shareholders of 30 A-share companies, with a total market value of about 4.517 billion yuan.
From the perspective of industry distribution, pharmaceutical, energy, automobile and other fields are the main investment directions of the Kuwait Government Investment Authority in A-shares. Wind data shows that Bethany, Songwon, Chenguang, China National Heavy Duty Truck, Xinji Energy, etc. were all increased by the Kuwait Government Investment Authority in the first quarter; In addition, it has newly become the top ten circulating shareholders of 11 companies including Kanghong Pharmaceutical and Shennan Circuit.
The third quarter may be a better time to enter the market
Recently, the ninth newly established wholly foreign-owned public Allianz Fund in China held a press conference in Shanghai. Wu Jiayao, President of Allianz Global Investors Asia Pacific and Chairman of Allianz Funds, said at the press conference that China's investment environment is changing rapidly. The opening up of the pension market, the growth of the middle class, the improvement of financial literacy and the widespread use of digital technology have all brought unprecedented opportunities to the Chinese market, and this is a great time to invest in China.
"At this stage, A-shares have many advantages such as low valuation, high marginal benefits of reform, and relatively wide investment opportunities, which deserve the renewed attention of global asset allocators." Huang Senwei, senior market strategist at AllianceBernstein, said that at present, A-shares are expected to become one of the key markets for risk diversification.
Goldman Sachs analysts said in a report that overall, the risk appetite of the A-share market may improve in the short term, and the trading environment will be more favorable.
For the outlook for the A-share market, Cheng Yu, general manager of the research department of Allianz Funds, said that China's stock market is experiencing an upward turning point driven by corporate earnings growth on the basis of low valuations, and the third quarter may be a better time to enter the market. "On the macro front, the economic recovery is expected to be further confirmed in the third quarter; Overseas, the Fed may also start cutting interest rates. At the micro level, the third quarter report is expected to show a trend of accelerating corporate earnings growth quarter by quarter. In addition, the third quarter or the whole year is a period of relatively high geopolitical risks, or you can take advantage of the potential volatility of the market to open positions. Cheng Yu said.
China's bond market is also facing new allocation opportunities. Lian Ping, president of the Guangkai Chief Industry Research Institute and chairman of the China Chief Economist Forum, believes that China's bond market will become increasingly attractive to international investors, and foreign investors' allocation of renminbi bonds, especially treasury bonds, will maintain a relatively rapid growth, which will become the main way and channel for overseas securities investment in China.
Reviewer: Hou Zhihong Editor: Yu Hongbo Proofreader: Jiao Yuanyuan Producer: Li Ruoyu
Issued by: Sun Hong
