Northbound added more than 60 billion yuan in positions in a single month. How will the A-share market go in March?

　　On the last trading day of February, the A-share market collectively closed in the red.

　　The Shanghai Composite Index closed up 1.94%, closing at 3015.17 points; the Shenzhen Composite Component Index closed up 3.13%, closing at 9330.44 points; the GEM Index closed up 3.32%, closing at 1807.03 points; the Science and Technology Innovation 50 closed up 4.68%, It closed at 807.71 points, with a cumulative increase of 17.94% in February; the Shanghai Composite 50 closed up 1.15%, at 2413.14 points, with a cumulative increase of 7.05% in February.

　　Northbound funds made unilateral net purchases of 16.603 billion yuan throughout the day, and the single-day net purchase amount hit a seven-month high. Among them, the Shanghai Stock Connect net purchase was 8.642 billion yuan, a net purchase for 23 consecutive days; the Shenzhen Stock Connect net purchase was 79.62 billion.

　　Looking at the entire month, northbound funds added a total of 60.744 billion yuan to the A-share market in February, a 13-month high.

Among them, the net purchase of the Shanghai stock market was 45.158 billion yuan, and the net purchase of the Shenzhen stock market was 15.586 billion yuan.

　　Industry insiders believe that driven by factors such as the continued buying of "national team" funds, the ban on securities lending, and the restriction of DMA quotas, market sentiment has recovered and the market is expected to continue this trend in March.

　　Northbound funds bought more than 60 billion yuan in a single month

　　On the last trading day of February, northbound funds flooded into the market again.

　　Wind data shows that on February 29, northbound funds bought 16.603 billion yuan in unilateral net purchases throughout the day, and the single-day net buying amount hit a new high in more than 7 months; the cumulative increase in positions in February exceeded 60 billion yuan, a 13-month high. .

The trading sentiment ignited by this move drove A-share trading volume to exceed one trillion yuan again. More than 5,200 stocks in the market rose, and the daily limit of 100 stocks was exceeded.

　　In February, with the support of funds, the Shanghai Stock Exchange Index rose by 8.13%, the Shenzhen Component Index rose by 13.61%, and the ChiNext Index rose by 14.85%. The three major indexes all showed positive lines for the first time after six consecutive negative monthly lines.

　　During the month, northbound funds added more than 10 billion yuan in positions four times in a single day. On February 21, they added 13.595 billion yuan in positions, setting a new high in single-day net buying amount since July 29, 2023.

Wind data shows that among the top ten companies with net inflows of northbound funds that day, 9 have foreign capital backgrounds. JPMorgan Chase Financial (Hong Kong) ranked first with a net purchase of 3.09 billion yuan, followed by Morgan Stanley Hong Kong Securities and The Hongkong and Shanghai Banking Corporation respectively. Net purchases of 2.89 billion yuan and 2.73 billion yuan ranked second and third.

　　Some institutional sources pointed out that the recent enthusiastic actions of northbound funds indicate their optimism about the A-share market.

Li Shihao, a strategy analyst at CITIC Securities, believes that since the beginning of this year, different types of overseas capital flows have clearly differentiated. Several indicators indicate that the trend of foreign capital's continuous reduction of A-share holdings since August 2023 has come to an end. China's overseas cross-border active funds have The average actual position has dropped to the level before 2018. It is expected that the intensity and sustainability of the subsequent "covering" of allocation funds will depend on the expected changes in the recovery of domestic fundamentals.

　　However, looking back at the performance of northbound funds at the beginning of the year and the performance of the A-share market in previous years, there is a certain time lag effect.

According to Qu Yiping, head of the total volume group and chief analyst of Oriental Fortune Securities, net purchases of northbound funds in the past January and February often indicate the strength of market funds in the following quarter.

　　In 2023, northbound funds stalled after a large increase in positions at the beginning of the year, and showed a weak inflow trend throughout the year. In the first January of the year, they poured in 141.3 billion yuan, and in the first two months, they added 150 billion yuan. Under the background of capital sentiment, the Shanghai Composite Index It recorded an increase of 1.33% in the following March and April, and then fluctuated at high levels.

　　Extending the timeline to 2022, northbound funds increased their positions by 16.8 billion yuan in January and 4 billion yuan in February. The Shanghai Composite Index recorded a drop of more than 6% in March and April respectively.

　　Markets are driven by emotions

　　Industry insiders said that market sentiment continues to recover, driven by factors such as the continued buying of "national team" funds, the ban on securities lending, and the restriction of DMA quotas.

　　Qu Yiping told reporters that the market recovery process in February is expected to continue in March. The core of judging the market is to observe whether the strength of the National Securities 2000 small-cap stocks can be sustained.

Looking back at the two serious deviations between large and small markets in the past 10 years, the deviations that occurred in the middle of the bull market were repaired quickly, while the deviations that occurred at the end of the bear market often took longer or even several quarters to repair.

The maximum deviation point of this round of large and small market was at the end of January, so we believe that the current repair has just begun.

　　"Currently, the sentiment aspect is still dominant." A certain equity fund manager in Shanghai told reporters that the Shanghai Composite Index has stood on the counter pressure line of the 60-day moving average. Observing the recent index from the lowest point of 2,635 points to 3,000 points, it is basically a positive line. Close.

Micro-cap stocks also recorded a recovery, with an increase of around 50%, and the share prices of many stocks doubled.

　　The aforementioned manager further stated that the stocks that have rebounded more recently are basically the stocks that have fallen more in the previous period, and the performance of making up for the decline is relatively normal, and the major indexes are expected to return to the levels at the end of 2023.

　　"We are currently in the first round of rebound." A public fund strategist said that from a strategic point of view, "high dividends" on the left and growth stocks on the right essentially focus on the growth of the subject stocks.

　　Yang Chao, a strategy analyst at Galaxy Securities, believes that the high dividend strategy must still be adhered to.

He pointed out that the current domestic economy is still in the period of real estate destocking and conversion of old and new driving forces. The economic recovery slope is slow and high-dividend assets are more certain and are expected to continue to attract the attention of investors. As policies continue to encourage listed companies to pay dividends, a sound The cash dividend governance mechanism, coupled with the marginal improvement in A-share profitability under the economic recovery environment, is expected to increase corporate willingness to pay dividends, driving the continued increase in cash dividends; after the recent rise, the current valuation of high-dividend assets is still at a historically low level, with relatively high High margin of safety.

　　"In the process of compensating for the market, the market is expected to fluctuate upward, and oversold growth stocks and the rotation of themes and concepts will become the main line of the market." An analyst at a large brokerage told reporters.

　　However, some people in the industry said that the current market is dominated by sentiment and is in a vacuum period of economic data, company financial reports and other fundamentals. The future trend of rising trends needs to be verified, and it is recommended to be cautiously optimistic.

　　First Finance Author: Chen Junjun