BEIJING, Sept. 30 (Xinhua) -- The increasingly important positions holding of institutional investors on China's A-share market is expected to have guided investors to make more value-based investment decisions in the third quarter, reported Securities Daily Wednesday.
By the end of June, market capitalization of total A-share positions held by institutional investors exceeded 30 trillion yuan, accounting for 49.71 percent of the A-share market's gross market cap, showed latest data from Orient Securities.
In a word, these figures indicated that institutional investors are increasingly important for China's A-share market at present.
Compared with mid 2019, institutional investors newly purchased or added holdings of stocks of 1,850 companies and slashed share holdings of 1,721 firms by the end of June. They favored non-ferrous metal and electronics sectors and dumped stocks of construction and decoration sectors.
Among all institutional investors, corporate entities as a whole was the largest holder of A-shares, with their holdings taking up 37.85 percent of the total A-share market cap by the end of June.
The second largest type of holders was habitual market players such as publicly-offered funds, sunshine private equity funds, which are essentially private investment trusts that function similar to hedge funds, asset management products of securities brokers, all of which altogether held 5.37 percent of the total market cap by mid 2020.
The third biggest type of holders was foreign institutions and the market cap of their A-share holdings rose from the 0.37 percent by the end 2015 to 2.89 percent by June this year.
Liu Feng, chief economist with China Galaxy Securities told the newspaper that increase of institutional investors signifies the development trend of A-share market and they are likely to grow step by step as the dominant force of capital market, which will in turn change the market investment concept.
Generally, institutional investors, as compared with individual investors, prefer longer investment cycle and have stronger risk awareness. They tend to pursue long-term and steady investment returns.
Kang Chongli, vice dean of the research institute under Yuekai Securities, noted that the accelerated entry of institutional investors will bring more new capital for A-share market in the short term and is good for spurring value-based and long-term investment to improve the A-share market resilience.
Thanks to the concept change of investors, publicly-offered funds ballooned this year. Statistics with Choice.eastmoney.com told that newly established publicly-offered funds totaled 1,141 ones this year, with the aggregate funds raised at 2.3 trillion yuan.
Yang Delong, chief economist with First Seafront Fund said over 70 percent of the newly-established funds this year are equity funds or funds mainly investing in stocks, signaling the transfer of residential deposits to capital market investment. This is not a short-term trend and will further improve the proportion of A-share holdings by institutional investors, Yang added. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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