Under normal circumstances, the shareholding ratio of Shanghai Stock Connect shows that the funds of Hong Kong investors flow into the A-share market to a certain extent. If the shareholding ratio of Shanghai Stock Connect declines, it shows that Hong Kong investors have reduced their holdings, which can reflect that the funds invested by Hong Kong through Shanghai-Hong Kong Stock Connect are gradually decreasing, indicating that some Hong Kong funds are on the sidelines in the A-share market.
On the other hand, if the shareholding ratio of Shanghai Stock Connect rises, it means that Hong Kong investors have increased their holdings, which can reflect that Hong Kong's investment funds through Shanghai-Hong Kong Stock Connect are gradually increasing, indicating that some Hong Kong investors are optimistic about the A-share market, and some Hong Kong investors may start speculating on A-shares.
Extended data:
One is Shenzhen Stock Connect and Shanghai Stock Connect.
Shanghai Stock Connect means that Hong Kong investors can directly participate in the stocks listed on the Shanghai Stock Exchange without restrictions, but not all stocks on the Shanghai Stock Exchange can be bought and sold, and only stocks listed on the Shanghai Stock Connect can be purchased. Shenzhen Stock Connect means that Hong Kong investors can use Shenzhen Stock Connect to buy stocks listed on Shenzhen Stock Exchange without restrictions. The rights of Shenzhen Stock Connect and Shanghai Stock Connect are different.
According to the regulations of Shanghai Stock Exchange, Shanghai Stock Exchange must meet the following requirements: 1 and 180 index; 2. As a constituent stock of SSE 380 Index and listed on A+H shares, if it is not satisfied, it will not be included.
According to the regulations of Shenzhen Stock Exchange, the shares of Shenzhen Stock Exchange must meet the following conditions: 1, A+H shares listed on Shenzhen Stock Exchange; 2. The market value of the underlying stock needs to meet the Shenzhen Stock Exchange Index of more than 6 billion yuan; 3. Small and medium-sized innovative constituent stocks with a market value of 6 billion yuan or more will not be included if they are not satisfied.
The advantage of incorporating Shenzhen Stock Connect and Shanghai Stock Connect is that it will be favored by Hong Kong or foreign investors, and the liquidity of stocks is better.
Second, the northbound funds
In China stock market, "going north" generally refers to the stocks in Shanghai and Shenzhen stock markets, and "going south" refers to the stocks in Hong Kong. Therefore, northbound capital refers to the capital flowing from Hong Kong stocks to the mainland stock market, and the mainland stock market also has capital flowing into the Hong Kong stock market, which is called southbound capital.
The capital of the north corresponds to the capital of the south. The north and south here is not what we usually call the north and south, but refers to Hong Kong. Northbound capital refers to the entry of Hong Kong and international capital into the A-share market, while southbound capital refers to the capital operated by China mainland in Hong Kong stocks. The names of these two funds were formed after the opening of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect in China.
The influence of capital outflow from the north
Northbound funds refer to the funds declared to each other between the Shanghai and Shenzhen stock exchanges and the unified exchange, relying on the exchange as the main body. Hong Kong funds and international funds can declare trading orders to local exchanges through local securities companies in Hong Kong to realize cross-border transactions. The combination of northward capital outflow refers to the outflow of Hong Kong capital and international capital in the trading market. The outflow of funds from the north means that foreign-funded enterprises and investors have not seen the development potential of the A-share market, and they hold a negative attitude, thinking that the A-share market will fall in the future, which is easy for A-share investors to misunderstand and mistakenly think that the A-share market is unfavorable. The A-share market is indeed affected by the world stock market, and its state is gradually depressed. For risk reasons, foreign investors have flowed out of the A-share market.