The A-share market recently experiences correction with the price of some stocks keeping falling. In this context, idle fund coveting elasticity of stock prices rides the fence.
Enthusiasm on theme stocks ebbs
Idle fund places great emphasis on hot theme stocks and sub-new stocks in recent years, and many stocks surge greatly. However, these stocks suffer huge slump since middle November.
Technology-themed stocks, represented by chips, 5G and artificial intelligence (AI), show strong performance in the second half. Stocks like Konfoong Materials International Co., Ltd. (300666.SZ), Wuhan Fingu Electronic Technology Co., Ltd. (002194.SZ) and Dawning Information Industry Co., Ltd. (603019.SH) see a maximum interval surge over 100 percent and boost stocks listed on the Small and Medium Enterprise Board and the ChiNext Board. But these technology-themed stocks also slipped amid recent index fluctuation.
Stocks like Konfoong Materials International, Hanwang Technology Co., Ltd. (002362.SZ) and Thunder Software Technology Co., Ltd. (300496.SZ) dropped over 15 percent weekly in the week ended on Nov. 24. While on Monday this week, technology-themed stocks suffered heavy loss. Over 20 stocks involved in chips, 5G and AI dropped by the intraday limit of 10 percent.
Old hotspots quickly ebb, while new hotspots are not created yet. Records of stocks rising by the intraday limit of 10 percent in recent two weeks show that excluding new stocks that are still rallying by the daily limit of 10 percent and stocks resuming trading, the number of stocks rising by the intraday limit of 10 percent sharply decline, and most of them rise because of oversold bounce.
The only one that can be defined as “new hotspot” is the theme concerning the backdoor listing of Qihoo 360 Technology (NYSE: QIHU). As news announced that Qihoo 360 Technology will achieve backdoor listing through SJEC Corporation (601313.SH), a rally by the daily limit of 10 percent was widely seen among relevant stocks in early November. However, only SJEC keeps rising by the intraday limit of 10 percent, and the rest relevant stocks drop largely after they fail to keep rising by the intraday limit of 10 percent. Hangzhou Sunrise Technology Co., Ltd. (300360.SZ) reported eight-day losing streak, totaling a drop of 30 percent, after it fails to keep rising by the intraday limit of 10 percent. CITIC Guoan Information Industry Co., Ltd. (000839.SZ) and Shandong Tyan Home Co., Ltd. (600807.SH) also return to their original stock price. Jiangsu Yoke Technology Co., Ltd. (002409.SZ), seeing a seven-day winning streak earlier, drops 25 percent after trading resumption.
Sub-new stocks experiences correction
Sub-new stocks also show sluggish performance. The sub-new stock index on Shenzhen market slumped 16.80 percent in recent 10 trading days. On one hand, investment opportunities in new stocks that fail to keep rising by the daily limit of 10 percent, attracting long-term attention of some idle fund, nearly all gone. 42 new stocks fail to keep rising by the daily limit of 10 percent since November, and up to now, only Shanghai Putailai New Energy Technology Co., Ltd. (603659.SH), Guizhou Gas Group Corporation Ltd. (600903.SH) and Shandong Publishing & Media Co., Ltd. (601019.SH) see their stock price higher than the price point where they fail to keep rising by the daily limit of 10 percent. The rest 39 sub-new stocks suffered huge drop after they failed to keep rising by the daily limit of 10 percent, and their price drop averaged to 23.20 percent.
On the other hand, strong performers of sub-new stocks also nosedived, best represented by BGI Genomics Co., Ltd. (300676.SZ). BGI Genomics, the leader of domestic genetic engineering industry, is widely interested in after it gets listed. Its stock price climbed steadily after it failed to keep rising by the daily limit of 10 percent, and closed at 257.02 yuan per share on Nov. 15, reaching a record high of its closing price and becoming the second highest stock price in the A-share market.
The trading volume ranking list shows that idle fund is the major pushing hands behind the price rise of BGI Genomics. Institutional seats of Huatai Securities, Zheshang Securities and Everbright Securities all appeared on the purchasing list of BGI Genomics since the stock failed to keep rising by the daily limit of 10 percent, and their single-day purchase of the stock all exceeded 50 million yuan.
However, BGI Genomics announced on Nov. 15 evening that the company would suspend trading for checking due to huge price surge. The stock resumed trading on Nov. 23, but no major issue was announced. The stock saw three-day losing streak, totaling a loss of 25.76 percent, after trading resumption.
First-tier idle funds wait and see
As the most influential institutional seat of idle fund this year, the business department of CITIC Securities located on Huaihai Zhong Rd, Shanghai tops all business departments with a business volume of 20.912 billion yuan. Besides strong capital strength, capital behind the institutional seat also shows outstanding ability in seizing hotspots.
But the aforementioned business department under CITIC Securities largely slowed down its trading since November due to the lack of hotspots in the market. Business volume of business departments on the trading volume ranking list totals only 158 million yuan now. Considering that there are only three trading days left in November, total business volume of all business departments on the trading volume ranking list is lower than 8 percent of previous monthly average.
In addition, business department of Zheshang Securities located on Shaoxin Jiefang Bei Rd, ranking the fifth in terms of business volume this year, only appeared on the purchasing list of two stocks in early November. Business department of CITIC Securities located on Gubei Rd, Shanghai, ranking the seventh in terms of business volume this year, takes no actions in November.
Some institutional seats of idle fund still stand fast. Business department of Guotai Junan Securities located on Jiangsu Rd, Shanghai is still struggling in stocks involved in chips and 5G. It appears on the trading volume ranking list of stocks like Shanghai Fullhan Microelectronics Co., Ltd. (300613.SZ), Konfoong Materials International Co., Ltd. (300666.SZ) and Hunan Goke Microelectronics Co., Ltd. (300672.SZ) since November. The business department purchased shares of ZTE Corporation (000063.SZ) with 219 million yuan amid slump of the stock on Nov. 27.
Business department of Huatai Securities located on Xiahe Rd, Xiamen and business department of China Investment Securities located on Qingyang Rd, Wuxi suffer a setback in sub-new stocks. The two business departments both purchased shares of Cig Shanghai Co., Ltd. (603083.SH) with over 20 million yuan on Nov. 24. Cig Shanghai opened lower and finally ended down 9.91 percent on Nov. 25. It was unlikely to gain profit.
Translated by Jennifer Lu
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