Net purchases by northbound investors amounted to RMB 28.5 billion in June amid turbulences at the A-share market, an analysis of the Shanghai Securities News shows on Friday.
Capital inflows into the A-share market, via its two stock-connect programs for overseas investors, generally remained positive in June. Amid the ups and downs at this market during the second half of this month, no significant outflows occurred.
The northbound investments in June were on a roller coaster. Following the inclusion of 226 A-shares into the MSCI Emerging Market Index on June 1, overseas investors continued their drive to build up stakes at the Chinese stock market, a spree that lasted until June 19 when the impact of multiple negative factors led to an extensive slump for the A-shares.
Since then, their investments had alternated between net purchases and net sales every other day as the A-shares slid down further.
During the same period, the Shanghai Composite Index and the Shenzhen Component Index stumbled by 7.78 percent and 8.76 percent respectively. The ChiNext board slumped by 5.97 percent.
While market fluctuations were affecting the direction and size of the capital flows, overseas investors still set their eyes more on the fundamentals and evaluations, an analyst believed.
Some of the northbound investors may opt for short-term operations, but in general they turn more attention to the fundamental aspects of their targets, said Gao Ting, head of China Strategy at UBS Securities Co., Ltd.
Since Jun 19 when the benchmark Shanghai Composite Index fell below the 3,000-point mark, these investors had been increasing their stakes in blue chips, e.g. Ping An Insurance had witnessed an aggregate net inflow of RMB 1.3 billion during the past ten days.
Also, the Yili Group, a dairy giant, and Kweichow Moutai, a top liquor producer, saw an aggregated inflow of RMB 423 million and RMB 160 million respectively.
Other top recipients included major players in pharmaceuticals, non-ferrous metals, and food & beverages.
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