Chinanews Client Beijing, September 10 (Reporter Xie Yiguan) On September 10, two data on the A-share market caused many investors to discuss.

  First, the Shanghai Stock Exchange Index closed at 3700 points after a lapse of 6 years; second, the turnover of A-shares exceeded one trillion yuan for 38 consecutive trading days.

  Why do A shares continue to rise?

Who is buying stocks?

Will it increase in the future?

The closing point of the Shanghai Stock Exchange Index hit a 6-year high, who is pushing it?

  On the 10th, the Shanghai stock index opened lower and continued to exert force. It reached a peak of 3,722.87 in early trading. Although it fell below 3,700 points, it finally closed above 3,700 points.

The last time the Shanghai Composite Index closed at 3700 points was in August 2015.

Shanghai index daily chart.

  The Shanghai Stock Index has performed well in the past month or so.

Since August 20, the Shanghai stock index has maintained a volatile upward trend, during which only 4 trading days closed down.

  In this regard, Zhang Gang, an analyst at Centaline Securities, believes that the market’s leading hot spots will rotate in an orderly manner, with core assets, cyclical industries and large financial sectors performing in turn, driving the Shanghai Index to frequently challenge new highs.

  "Under the background of restricting the'two highs' and carbon neutrality, some traditional industries have experienced a tight balance between supply and demand, and the investment logic of some industries has changed. The double increase in valuation and performance has triggered them to step out of the main market." Soochow Wu Yao, a senior investment consultant in the Securities Wealth Management Department, believes that cyclical stocks and large financial stocks are the main drivers of the Shanghai Index's new highs.

The turnover of A shares exceeded one trillion for 38 consecutive trading days. Who is buying?

  On the 10th, Northbound funds bought 3.619 billion yuan in net purchases throughout the day; the turnover of the two cities exceeded 1.5 trillion yuan throughout the day, marking the 38th consecutive trading day that exceeded one trillion yuan.

  A review found that if the “daily trillion transactions” is maintained for another week, it will surpass the record of 43 consecutive trading days created by A shares from May 8, 2015 to July 8, 2015.

  According to Zhang Xinyuan, chief analyst of Huatai Securities' strategy, behind the recent high turnover may be mainly the three forces of public fund adjustments, active northbound funds and quantitative high-frequency trading.

  "Considering the rapid expansion of the scale of top quantitative private equity funds this year, and the sharp increase in the number of new private equity fund product filings announced on the private equity ranking website as of the end of August, we believe that private equity quantitative funds do have an impact on the current high daily trading volume of A shares. Contribution, but limited by the availability of data, the specific degree of contribution is unknown." Zhang Xinyuan said.

Data map: In front of the business department of Bohai Securities Shanghai Zhangwu Road, the staff guides shareholders on the online transaction process.

Photo by China News Agency reporter Yin Liqin

  Northeast Securities analyst Deng Lijun believes that the main driving force of the recent high turnover is emotional funds, which stems from the temporary decline in institutional excess returns after the market value style switch.

  According to media reports, in the fund market, while the leading value stocks were abandoned by the market, the SSE 50 ETF, which holds these "beautiful 50" stocks, has "decreased and bought more." The fund share has soared by 3.123 billion shares in the past month.

  As of September 9, the total share of the SSE 50ETF was 16.202 billion, a record high this year.

Calculated based on the average transaction price in the range, the net inflow of funds in the past month was 9.978 billion yuan, approaching the 10 billion integer mark, and it has become the most popular stock ETF product in the near future.

Data map: Shareholders of a securities business department in Haikou pay attention to the market trend.

Photo by China News Agency reporter Luo Yunfei

How long will the high market activity last?

  The market is briskly trading and continues to have high turnover. Investors are generally concerned about whether such a high level of market activity can be maintained for a long time and whether it will break the record of breaking the trillion yuan for 43 consecutive trading days in 2015.

  "In terms of public funds, under the cross-effects of the economy, valuation, policies, etc., direction selection and position adjustments may still be entangled until the third quarter reporting period; in terms of northbound funds, it is expected that the actual Taper (large-scale bond purchase plan) at the end of the year will become northbound. Inactivating agent for active funds; in terms of private equity funds, from the perspective of scale and estimated trading volume, the current counterparty volume is still sufficient, and it is expected that the activity may remain." Zhang Xinyuan said.

  Shanxi Securities analyst Ma Wenyu believes that the current overall valuation of A-shares is still at a low level, the technology industry continues to maintain a high growth rate, there is still room for recovery in consumer topics, the overall fundamentals of A-shares are strongly supported, and the index continues to fluctuate upwards for a long time.

  Deng Lijun believes that “on the whole, micro-capital conditions are difficult to maintain the current high turnover, and the market will continue to fluctuate in the short-term. With the proliferation of styles, the focus is on high and low switching, and small and medium-sized stocks are still dominant. Relevant industry opportunities caused by policy catalysis such as “new” and “double reduction”.” (End)

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