22th July 2019
Foreign Investments in China's
A-shares Weekly
Net inflow of foreign funds via Stock Connect from 15 – 19 July: 9.4 RMB bln
Net inflow of foreign funds via Bond Connect in Jun: 36.7RMB bln
Global Markets Performance ⚫ China’s Nasdaq-like STAR Market to launch 25 IPOs today. Known as Sci-Tech Innovation Board or STAR Market in short, the new technology Prior Week Index %Change board’s first 25 IPOs’ PE ratios range from 18 – 170 times, with total Price RMB 37 billion raised.
SZE 9443 +2.9 Stock code Name P/E Price(RMB) 688001 SUZHOU HYC TECHNOLOGY 41 24.26 688002 RAYTRON 79 20.00 Nikkei225 21746 +2.2 688003 TZTEK 57 25.50 688005 NINGBO RONBAY NEW ENERGY TECHNOLOGY 58 26.62 688006 CHR 40 27.43 NASDAQ 8162 +1.9 688007 APPOTRONICS 48 17.50 688008 MONTAGE TECHNOLOGY 40 24.80 688009 CRSC 19 5.85 688010 RICOM 49 25.22 FTSE100 7553 +1.7 688011 HARBIN XINGUANG OPTIC-ELECTRONICS TECHNOLOGY 58 38.09 688012 AMEC 171 29.01 688015 TCT 43 16.18 688016 ENDOVASTEC 40 46.23 DJIA 26922 +1.2 688018 ESPRESSIF 57 62.60 688019 ANJI 48 39.19
688020 FB 39 53.88 SZE 3011 +1.1 688022 HARMONTRONICS 44 25.79 688028 WORLDIA 34 26.68 688029 MT 40 52.45 688033 TYSJ 35 20.37 HSI 28775 +0.8 688066 BEIJING PIESAT INFORMATION TECHNOLOGY 46 17.25 688088 ARCSOFT 74 28.88 688122 WESTERN SUPERCONDUCTING TECHNOLOGIES 68 15.00 688333 BRIGHT LASER TECHNOLOGIES 68 33.00 688388 GUANGDONG JIA YUAN TECHNOLOGY 37 28.26
⚫ STAR Market’s trading limits are capped, up or down, of not more than 20% in a single day. Only on the first five day of IPO trading that limits are not set.
⚫ 18th Jul, Foreign Exchange Income and Expenditure Data of the State
This report is available on Thomson Reuters Administration of Foreign Exchange (SAFE) reported H1 2019’s figures: Eikon, , Bloomberg BMART, S&P Capital IQ, ➢ Foreign investors' net increase in bonds and stocks in 1H 2019 Wind, iFinD, Dazhihui, Choice，FactSet amounted to USD 49.3 bln Embargoed Research and other authorized ➢ SAFE is considering further relaxing or even removing QFII quota
vendors. restrictions.
Global Distribution: Ted Worley ⚫ QFII-approved Oppenheimer Fund had unloaded more than 9 million Email：[email protected] shares of TCM company Donga-E-E-Jiao (SHE: 000423) before it Asia Helpdesk: Catherine Yap Email:[email protected] announced the H1 financial report. TEL：(65) 6743 1728 China Distribution: Mike Lee ⚫ National Development and Reform Commission (NDRC) further imposes Email：[email protected] restrictions on overseas borrowing by real estate companies, only TEL：（ 86) 21 6607 5535 allowing these companies to issue foreign debts to replace those foreign debts due to mature next year.
1 Foreign Investments in China's A-shares Weekly
th 22 July 2019
IMPORTANT ANNOUNCEMENTS
20th Jul: State Council’s Financial Stability and Development Committee announced a slew of new measures to further open up its financial markets, these include:
• Allowing foreign-funded institutions to conduct credit rating on China’s bonds in the inter-bank and exchange bond market.
• Overseas financial institutions can participate in setting up and investing in the asset management subsidiaries of commercial banks.
• The overseas asset management agencies will be permitted to co-establish foreign-controlled asset management companies together with subsidiaries of Chinese banks or insurers.
• New rule that allows overseas financial institutions to invest in setting up or holding stakes in old-age pension management companies.
• Support foreign capital to establish or hold stakes in currency brokerages.
• The upper shareholding limits for foreign investors in domestic insurers can exceed 25%.
New measures and further opening up will facilitate foreign institutional investors in investing in the inter-bank bond market.
2 Foreign Investments in China's A-shares Weekly 22th July 2019
Stock Connect Trading Volume
RMB bln Hong Kong Hong Kong Hong Kong Stock Connect Stock Connect Stock Connect Over the past month, average 25 daily trading volume of
20 Northbound Stock Connect was RMB 32.8 bln, up 8.1%.
15 In comparison, average trading
10 volume via Southbound Connect
5 totaled RMB 5.8 bln, down 8.3%.
0 Wk 4 Wk 1 Wk 2 Wk 3 June July July July
Source: China Knowledge Databank
Bond Connect Trading Volume
Average Daily Net Value of Trading Volume(RHS) Foreign Funds(LHS) RMB bln In June, average daily trading RMB bln 60 10 volume is RMB 9.1 bln, up 9.06 9 20% since last month. Net 50 8 value of foreign funds is RMB 7 40 36.7 bln, down 29.7% 6 36.7 over the last month. 30 5
4 20 3
2 10 1
0 0 Mar 2019 Apr 2019 May 2019 Jun 2019
Source: HKEx
3 Foreign Investments in China's A-shares Weekly
th 22 July 2019
Foreign Funds Flow Breakdown
RMB bln Northbound Southbound With respect to Mainland 12.0 China, 10.0 9.4 net inflow of foreign funds via 8.0 Northbound Connect was 6.0 RMB 9.4 bln. Net inflow of
4.0 2.9 foreign funds via Southbound
2.0 Connect was RMB 2.9 bln.
0.0
-2.0
-4.0
-6.0 Wk 4 Wk 1 Wk 2 Wk 3 June July July July
Source: China Knowledge Databank
With respect to Mainland China, net infiow of foreign funds is RMB 6.4 bln.
Southbound Connect：RMB 2.9 bln Northbound Connect：RMB 9.4 bln
4 Foreign Investments in China's A-shares Weekly th 22 July 2019
Top 10 A -shares traded Last Friday (A-shares eligible via Stock Connect)
Shanghai Connect Northbound Shanghai Connect Southbound
Buy Sell % of Outstanding Buy Sell % of Outstanding Stock Code Name Shares Held Stock Code Name Shares Held (RMB mln) (RMB mln) thru Connect (RMB mln) (RMB mln) thru Connect
601318.SH PING AN INSURANCE 757.1 342.2 7.3 00939.HK CCB 126.3 49.3 4.4
600519.SH KWEICHOW MOUTAI 625.1 233.4 8.4 03333.HK EVERGRANDE 54.4 116.4 1.4
600276.SH JIANGSU HENGRUI MEDICINE 430.1 197.0 12.0 00700.HK TENCENT 79.6 90.9 1.4
POLY DEVELOPMENTS AND 600048.SH 288.0 192.0 2.5 02318.HK PING AN 92.3 66.8 1.9 HOLDINGS GROUP
600036.SH CHINA MERCHANTS BANK 375.6 104.3 4.2 00388.HK HKEX 96.2 61.3 1.6
INNER MONGOLIA YILI 600887.SH 205.6 224.5 13.2 02899.HK ZIJIN MINING 47.7 97.2 19.8 INDUSTRIAL
600585.SH ANHUI CONCH CEMENT 236.1 113.8 10.9 02020.HK ANTA SPORTS 81.3 58.0 3.6 601155.SH SEAZEN HOLDINGS 246.5 84.6 1.4 01918.HK SUNAC 41.4 63.2 20.1
CHINA INTERNATIONAL 601888.SH 200.8 106.4 13.0 01787.HK SD GOLD 64.8 16.9 18.6 TRAVEL SERVICE
601166.SH INDUSTRIAL BANK 158.6 119.2 2.6 01299.HK AIA 79.1 2.3 0.5
Source: China Knowledge Databank
Shenzhen Connect Northbound Shenzhen Connect Southbound
Buy Sell % of Outstanding Buy Sell % of Outstanding Stock Code Name Shares Held Stock Code Name Shares Held (RMB mln) (RMB mln) thru Connect (RMB mln) (RMB mln) thru Connect GREE ELECTRIC 000651.SZ APPLIANCES INC OF 482.2 266.5 10.5 00996.HK CARNIVAL GROUP 86.5 70.0 28.3 ZHUHAI HAN'S LASER 002008.SZ TECHNOLOGY 144.8 584.8 14.7 01918.HK SUNAC 65.9 34.9 20.1 INDUSTRY GROUP
000002.SZ CHINA VANKE 488.8 209.6 3.3 00700.HK TENCENT 52.5 33.4 1.4
000333.SZ MIDEA GROUP 390.2 213.8 14.0 00763.HK ZTE 10.4 70.5 23.2
000858.SZ WULIANGYE YIBIN 495.1 105.9 7.0 01818.HK ZHAOJIN MINING 62.7 2.8 7.2
BOE TECHNOLOGY 000725.SZ 74.2 230.8 1.6 02628.HK CHINA LIFE 62.2 1.3 2.4 GROUP
000338.SZ WEICHAI POWER 244.0 39.6 6.7 01776.HK GF SEC 35.2 22.4 15.6
002714.SZ MUYUAN FOODS 126.8 140.5 2.7 01177.HK SINO BIOPHARM 43.3 6.4 5.0
WENS FOODSTUFF 300498.SZ 145.6 102.4 1.7 01787.HK SD GOLD 23.9 20.4 18.6 GROUP EAST MONEY 300059.SZ 134.4 104.8 1.7 02020.HK ANTA SPORTS 37.8 6.3 3.6 INFORMATION
Source: China Knowledge Databank
5 Foreign Investments in China's A-shares Weekly th 22 July 2019
Sectors Traded via Stock Connect
Over the past week, 5th12th July 12th19th July July the market value of RMB bln Mainland stocks 300 traded on Stock Connect decreased 250 most sectors. Top gainer was Financials 200
150
100
50
0
I.T
Energy
Telecom
Staples
Financials
Consumer
Healthcare Real Estate
Consumer
Discretionary
Public Utilities
Rawmaterials Manufacturing
Source: China Knowledge Databank
Top 10 A-shares Increment on Stock Connect Top 10 A-shares Reduction on Stock Connect
Stock Change in Market Stock Change in Market Name Change% Industry Name Change% Industry Code Value(RMB bln) Code Value(RMB bln) KWEICHOW Consumer 600036.SH CMB 1.9 6.5 Financials 600519.SH -1.9 -1.8 MOUTAI Staples
PING AN OF Consumer 601318.SH 1.3 1.9 Financials 000333.SZ MIDEA GROUP -1.7 -3.3 CHINA Discretionary 000002.SZ VANKE-A 0.9 9.8 Real Estate 002008.SZ HAN"S LASER -1.4 -24.9 I.T
Consumer 600031.SH SANY 0.7 9.5 Manufacturing 600887.SH YILI -1.3 -5.0 Staples
300059.SZ EASTMONEY 0.6 47.1 I.T 002415.SZ HIKVISION -0.7 -4.5 I.T
Consumer 000725.SZ BOE 0.5 28.2 I.T 000858.SZ WULIANGYE -0.7 -2.0 Staples
WEICHAI Consumer Consumer 000338.SZ 0.4 8.8 000651.SZ GREE -0.6 -1.6 POWER Discretionary Discretionary
YUNNAN 601012.SH LONGi 0.3 8.4 I.T 000538.SZ -0.5 -6.5 Healthcare BAIYAO 600009.SH SIA 0.3 1.4 Manufacturing 600276.SH HR -0.5 -1.3 Healthcare
Consumer 600848.SH SLHC 0.3 469.4 Real Estate 002304.SZ YANGHE -0.4 -2.9 Staples
Source: China Knowledge Databank
6 Foreign Investments in China's A-shares Weekly th 22 July 2019
QFII Holding Changes at Q1 vs Weekly Average Turnover in A-shares Market
A-shares weekly average Change in QFIIs‘ Mkt Cap Last week, the sector with turnover 2018 Q4 over 2019 Q1 highest daily turnover was
Healthcare I.T, standing at 26.83% of
Consumer Discretionary average turnover.
I.T Lowest daily turnover was Consumer Staples Public Utility. Manufacturing In Q1 2019, the market Raw Materials cap of the healthcare Consumer Discretionary Real Estate sector increased the most
Telecom across QFII holding
Energy portfolios, up 19.7%.
Public Utility of QFII portfolio. 0% 5% 10% 15% 20% 25% 30%
Source: China Knowledge Databank
Week Returns : QFII vs A-shares
QFII A股 Last week, QFII 6% portfolio 5% underperformed A- 4% shares market. A- shares' overall 3% performance was up 2% 0.2%, whereas A- 1% 0.2% shares held by QFII 0% fell by 1.4%.
-1% -
-2% -1.4%
-3% Wk 3 Wk 4 Wk 1 Wk 2 Wk 3 Jun Jun Jul Jul Jul
Source: China Knowledge Databank
Note: QFII holdings are as of latest filing quarter.
7 Foreign Investments in China's A-shares Weekly th 22 July 2019
Weightage of QFIIs'Stocks by Sector
As of 2019 Q1 2018 Q4
Others Raw Others Raw Materials 3% Consumer Materials 4% Consumer 6% 7% Discretionary Discretionary 24% Manufacturin 22% Manufacturing g 11% 11%
I.T 10% I.T 12% Consumer Consumer Staples Staples 17% Healthcare 17% 11% Healthcare Financials 13% Financials 18% 14%
Sources: SAFE, China Knowledge Databank
QFII & RQFII Quota Approved
QFII - LHS RQFII - RHS USD bln RMB bln 108 700 In Jun, the QFII quota was up USD 1.2 bln to USD 106 680 107.0 bln. 104 660
640 102 The RQFII quota was up 620 100 RMB 0.65 bln to RMB 600 677.97 bln. 98 580 96 560 94 540 92 520 Feb 2016 Oct 2016 Jun 2017 Feb 2018 Oct 2018 Jun 2019
Sources: SAFE, China Knowledge Databank
Monthly QFII Quota Approved Monthly RQFII Quota Aprroved （USD hundred mln） （RMB hundred mln） 14
12 180 160 10 140 8 120 100 6 80 4 60 40 2 20 0 0 Feb 2016 Dec 2016 Oct 2017 Aug 2018 Jun 2019 Feb 2016 Dec 2016 Oct 2017 Aug 2018 Jun 2019 Sources: SAFE, China Knowledge Databank
8 Foreign Investments in China's A-shares Weekly th 22 July 2019
QFIIs’Ranking
Top 20 A-shares Holdings by Top 20 A-shares Holdings by Market Value (As of Previous Week Closing) Market Value (As of Previous Week Closing) Market cap % Change % of shares % Change Stock Code Name owned by over Industry Stock Code Name owned by over Industry QFII(RMB Bln) past week QFII past week Bank of Beijing Bank of Beijing 601169.SH 13.6 0.4 Financials 601169.SH 15.5 0.4 Financials Co.,ltd. Co.,ltd. Flyco Electrical Consumer Consumer 603868.SH 11.1 -2.0 000333.SZ Midea Group 12.5 -4.0 Appliance Discretionary Discretionary
Consumer Kweichow Consumer 600132.SH Chongqing Brewery 7.3 -1.1 600519.SH 6.6 -3.1 Staples Moutai Staples Focused 300203.SZ 7.2 -4.4 I.T Jiangsu Hengrui Photonics,Inc. 600276.SH 6.1 -0.6 Healthcare Medicine Shanghai 300180.SZ Huafon Microfibre 7.1 -5.1 Raw Materials 600009.SH International 4.0 -0.5 Manufacturing Airport Venustech Group 002439.SZ 7.1 1.7 I.T Consumer Inc. 600690.SH Qingdao Haier 3.9 -2.9 Discretionary Oriental 300166.SZ Business- 6.3 2.4 I.T China International Consumer Intelligence 601888.SH 3.3 -2.1 Travel Service Discretionary 600761.SH Anhui Heli 5.8 0.0 Manufacturing Gree Electric Consumer 000651.SZ 2.4 -4.0 Appliances, Inc. Discretionary 300298.SZ Sinocare Inc. 5.5 -11.3 Healthcare Anhui Conch 600585.SH 2.1 -1.7 Raw materials Cement Co.Ltd Baoji Titanium 600456.SH 5.2 8.0 Raw Materials Industry Yanghe Brewery Consumer 002304.SZ 2.1 -3.9 Joint-Stock Staples Consumer 002186.SZ China Quanjude 5.2 -0.6 Discretionary 002142.SZ Bank Of Ningbo 1.9 2.5 Financials Shangpin Home Consumer 300616.SZ 5.2 6.2 Collection Discretionary Hikvision Digital 002415.SZ 1.8 -1.8 I.T Technology 002938.SZ Avary Holding 5.2 4.0 I.T Aier Eye Hospital 300015.SZ 1.7 -1.9 Healthcare Group 000423.SZ Dong-E-E-Jiao 5.1 -16.5 Healthcare
Venustech 002439.SZ 1.7 1.7 I.T Contemporary Group Inc. 300750.SZ Amperex 5.0 -1.9 Manufacturing Technology Chongqing Consumer 600132.SH 1.5 -1.1 Brewery Staples 603416.SH Xinje Electric 4.9 0.6 I.T
Huiding Technology 603160.SH 1.4 3.5 I.T Co.,ltd. 002706.SZ Liangxin Electrical 4.9 0.8 Manufacturing
601668.SH CSCEC 1.2 2.6 Manufacturing China Merchants 001965.SZ 4.8 0.7 Manufacturing Expressway
Baoshan Iron 600019.SH 1.2 -0.9 Raw materials & Steel 600533.SH Chixia Development 4.7 -1.1 Real Estate
000423.SZ Dong-E-E-Jiao 1.1 -16.5 Healthcare 000089.SZ Shenzhen Airport 4.7 -1.6 Manufacturing
Sources: SAFE, China Knowledge Databank Sources: SAFE, China Knowledge Databank
9 Foreign Investments in China's A-shares Weekly th 22 July 2019
Source of QFII funds
Others, 7.8% Macao, 2.8% Hongkong, 22.5% England, 4.4%
Norway, 5.3%
Canada, 7.8%
Switzerland, Singapore, 7.9% 17.9%
America, 11.2% Netherlands, 12.3% Source: China Knowledge Databank
Top QFII by Market Value of Holdings
Top 20 QFII by Market Value of Holdings(As of 2019 Q1)
2019 Q1 Mkt Value No. of companies Institutional Investor QoQ % change Country (RMB hundred mln) invested Government of Singapore Investment Corp 193.2 74.1 23 Singapore ING Bank N.V. 154.4 10.5 1 Netherlands E Fund Management (HK) co.ltd 116.9 42.2 3 Hongkong United Bank of Switzerland 98.8 89.6 58 Switzerland Canada Pension Plan Investment Board 73.1 78.4 14 Canada Oppenheimerfunds Inc 72.9 84.1 2 America Hillhouse Capital GR 66.2 49.5 4 Hongkong Norges Bank 65.9 67.4 30 Norway Aberdeen Asset Management Limited PLC 47.8 78.4 9 England Monetary Authority of Macao 34.9 107.4 13 Macao FIL Investment Management （HK） .ltd 27.4 55.6 10 Hongkong Central Bank Of Malaysia 20.1 131.3 2 Malaysia Societe Generale 19.8 - 207 France OCBC Bank Limited 16.9 30.9 1 Singapore Bill & Melinda Gates Foundation 16.0 23.6 6 America ABU Dhabi Investment Authority 15.1 96.8 10 UAE CDPQ or la Caisse 14.9 124.1 8 Canada Hong Kong Monetary Authority，HKMA 13.0 157.3 9 Hongkong China International Capital Corp HK Asset Management .ltd 12.9 434.3 7 Hongkong Yuan Xing Asset Management ltd 12.8 35.7 1 Hongkong Merrill Lynch International 12.4 65.9 5 America Morgan Stanley Investment Management Inc. 11.8 22.2 7 America Overlook Investment .ltd 9.8 3.9 2 Hongkong Temasek Fullerton Alpha Investments Pte Ltd 9.6 55.1 1 Singapore Fubon Life Assurance Co., Ltd. 9.1 25.5 5 Taiwan Deutsche Bank Aktiengesellschaft 8.5 26.0 4 Germany British Columbia Investment Management Corporation 8.5 62.5 6 Canada CMS ASSET MANAGEMENT (HK) CO., LIMITED 8.3 30.6 2 Hongkong CMS Asset Management (HK) co.ltd 7.0 144.8 5 England
Goldman, Sachs & Co. 7.0 94.9 4 America
Source: China Knowledge Databank
1010 Foreign Investments in China's A-shares Weekly th 22 July 2019
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1111 Foreign Investments in China's A-shares Weekly