CICC: Active foreign capital continues to flow out, while passive foreign capital turns into inflow.

The China International Strategy Research Team stated that in terms of foreign capital, in the past week, according to EPFR data (as of Wednesday): active foreign capital continued to flow out, with a outflow of $170 million from A shares, which is consistent with the outflow size of the previous week; there was an outflow of $410 million from Hong Kong stocks and ADR (compared to an outflow of $370 million last week); the outflow was mainly from funds focusing on China and global emerging markets. Passive foreign capital turned into inflow, with an inflow of $450 million into A shares (compared to an outflow of $200 million last week); Hong Kong stocks and ADR saw a significant inflow of $1.32 billion (compared to an inflow of $350 million last week), with inflows mainly from funds focusing on China and emerging markets. As for southbound capital, this week saw an inflow of HK$13.89 billion (compared to an inflow of HK$28.38 billion last week), with a daily average inflow of HK$3.47 billion (compared to a daily average inflow of HK$5.68 billion last week). So far this year, southbound capital has accumulated an inflow of HK$739.87 billion. At the individual stock level, Semiconductor Manufacturing International Corporation, Meituan, and INNOVENT BIO saw the most increase in holdings last week, but there were outflows from Alibaba, Tencent, and Xiaomi. For the past month, the market has been fluctuating within the range of 23,000-24,000 as suggested by China International, with the weighted ERP similar to the peak in early October last year. Short-term herd behavior in new consumer innovative drugs is evident, reflected in the trading "crowdedness" and the proportion of southbound capital inflows to each sector. Tightening short-term liquidity, uncertainties in tariff negotiations, weakening data, and delayed policy implementation could all cause market volatility. China International recommends that investors currently reduce their positions moderately, switch to stable dividend-paying stocks, or switch to AI-related Internet targets that have cooled from the beginning of the year, and wait for further opportunities. If there is significant volatility, it may be more proactive to intervene, buying back quality assets at lower costs, but the precondition is to preserve enough "ammunition."