Funds don’t come to market
After the “Arrival” of A shares, the market did not receive a significant boost. The Shanghai Composite Index fell for a third consecutive week and fell 0.26% last week. The performance of the Shenzhen Stock Exchange has been able to recover 0.36%. Over the past three weeks, the daily average turnover of the market has continued to decline, which is an important reason constraining the performance of the market. Although the market did not see major adverse news, it still lacked the catalyst to attract funds into the market. If the current low turnover cannot be changed, it is also difficult for the Shanghai Composite Index to retain 3,000 points.
Since the “Arrival of A Shares” formally entered into force in June, foreign investors have continued to buy A shares. The net inflow of Shenzhen-Hong Kong stocks to the north has increased to a level of 6 billion yuan (RMB) or 4 billion yuan. Since then, about 1 billion yuan and 2 billion yuan have risen significantly every day.
Benefiting from the inflow of overseas capital, the performance of MSCI’s concept stocks outperformed the market. Among them, food, home appliances, pharmaceuticals, electronics, and steel stocks performed the best. Last week, the cumulative gains of related sectors all exceeded 1%. Among them, Hengrui Medicine (600276.SH) rose 9.65%, Pioneer Group (600436.SH) rose 7.61%, Oufei Technology (002456.SZ) rose 10.09%, Midea Group (000333.SZ) rose 4.81%, Haitian Flavor (603288.SH) rose 8.59%, Baosteel (600019.SH) rose 7.8%.
Unfavorable news
However, the current A-share market is still dominated by retail investors. Individuals are not allowed to enter the market, and foreign investors can hardly hold up the market. A number of shares that had previously accumulated a certain amount of increase have recently taken a turn for the worse. Among them, media and environmental protection stocks, which were particularly affected by unfavorable news, fell more significantly. They fell 2.97% and 2.58% respectively in the week.
The poor performance of media stocks was mainly caused by artist Fan Bingbing’s alleged signing of the “Yin and Yang Contract” to evade taxation. As a result, the incident alerted the official and the tax authorities launched investigations. The media company is in danger. Investors also sold TV entertainment shares one after another. Huayi Brothers (300027.SZ), which is closely related to Fan Bingbing, fell 13.45% over the week.
At present, with the official intervention, although there is no further information on the market, the investigation has not yet been completed. The impact on the film and television enterprises is still unknown. It is not appropriate for investors to collect goods prematurely so as to avoid mistakes.
As for environmental protection stocks, they were dragged down by the official announcement of a reduction in subsidies for the photovoltaic industry, which caused the related shares to continue to fall. Taking Sunshine Power (300274.SZ) as an example, it has fallen 28.39% last week. The stock has continued to fall since mid-May and the stock price has barely fallen in the past four weeks.
In recent years, the mainland government has continued to reduce subsidies in a variety of environmental protection industries. It is necessary for companies to strengthen themselves and control costs so that they can survive after the subsidies are fully withdrawn. A few years ago, the environmental protection industry also passed a major reshuffle after a round of product oversupply. The result was a weaker and weaker player, which made the industry develop healthier. I believe that in the future, after the subsidy is reduced, the industry reshuffle will be more severe, and the remaining enterprises will have more room for development and the outlook will become clearer. For environmental protection leading enterprises, the author thinks that investors may wish to continue to pay attention, and after the stock price has fallen, it is worth lowering gradually.