Middle East conflict into full moon, Korean capital pours into A-share for hedging, what did they focus on buying?

Recently, the ongoing Middle East conflict has been fermenting. Since March 2nd, the A-shares have been running under the influence of the Middle East conflict for a full month. During this month, although the A-shares have maintained a volatile trend, they have still shown resilience. Meanwhile, markets in Japan and South Korea have experienced significant fluctuations. In this backdrop, many South Korean investors have poured into A-shares for refuge. SEI Bro data shows that as of April 2nd, South Korean investors have net bought $6.6118 million of Sany Heavy Industry in the past month, making it the A-share target with the highest additional position scale. Broad-based ETFs are also favored, with the Fortune CSI 300 ETF receiving net inflows of $2.1627 million in the past month with zero sales. In addition, the Huabao CSI Bank ETF has become a preferred safe haven option, receiving net inflows of $0.915 million from South Korean investors in the past month. While adding positions in safe-haven assets, South Korean funds have also bought into multiple targets in the technology sector. Among them, the Huaxia Shanghai Science and Technology Innovation Board 50 ETF and the Huaxia CSI 5G Communications Theme ETF received net inflows of $0.4533 million and $3.4112 million respectively. In addition, companies like Zhongji Innolight, Suzhou Everbright Photonics, and Shennan Circuits in the optical module, semiconductor, and PCB sectors have seen an increase in positions. Industry insiders emphasize that the Chinese technology industry chain has strong controllability and stability in the supply chain, with some leading companies in the sector having no similar counterparts in the South Korean market, making them attractive to South Korean investors. South Korean investors flock to A-shares for refuge, with broad-based ETFs and bank ETFs receiving net inflows SEI Bro data shows that as of April 2nd, the A-share target with the highest net inflow from South Korean investors in the past month was Sany Heavy Industry, with a net inflow of $6.6118 million. In addition, broad-based ETFs have become popular investment targets for South Korean investors. In the past month, South Korean investors net bought $2.1627 million of Fortune CSI 300 ETF. It is worth noting that even in an environment of increased volatility in the A-share market, South Korean investors have not sold any shares of the ETF in the past month, reflecting their firm confidence and long-term allocation intentions in the CSI 300 ETF. Industry analysts point out that South Korean investors are firm in holding the CSI 300 ETF for several reasons: First, A-shares are relatively less affected by external events and have obvious safe-haven value compared to the volatile South Korean market; second, the recent increase in the volatility of the South Korean won exchange rate, while the Renminbi exchange rate shows an appreciation trend, the expectations of Renminbi appreciation further enhance the attractiveness of Renminbi assets; third, the current valuation of A-shares is still at a reasonable level, with a higher investment cost-benefit ratio compared to markets such as the US and South Korea. In addition to the Fortune CSI 300 ETF, South Korean investors have also shown a net inflow trend in the Huabao CSI Bank ETF in the past month, with net inflows of $0.915 million. Industry insiders point out that A-share bank assets have stable profitability and dividend levels, making bank ETFs typical of low-volatility dividend assets with outstanding defensive attributes, thus also receiving active allocations from South Korean safe-haven funds. In addition to ETF products, South Korean investors have also bought into several central-entrepreneurial infrastructure, energy, and power companies. Power Construction Corporation of China, Ltd (POWERCHINA, China National Chemical Engineering, Dongfang Electric Corporation, and other heavy-asset companies have received net inflows from South Korean investors in the past month, with net inflows of $2.1512 million, $0.7014 million, and $0.4387 million respectively. Energy companies such as Ganfeng Lithium Group and LONGi Green Energy Technology have also been favored by South Korean investors, with net inflows of $2.3473 million and $0.7641 million in the past month. The technology sector also sees increases, with 5G ETFs and semiconductor concept stocks being favored In addition to safe-haven targets such as bank ETFs and infrastructure companies, South Korean investors have also increased their positions in stocks or ETFs in the technology sector. Among them, the Huaxia Shanghai Science and Technology Innovation Board 50 ETF has received net inflows of $0.4533 million from South Korean investors in the past month. As the core index of the Science and Technology Innovation Board, the Science and Technology 50 index covers hard technology sectors such as semiconductors, artificial intelligence, biomedicine, and high-end manufacturing, allowing South Korean investors to easily allocate Chinese technology stocks. The Science and Technology 50 index is still within a reasonable valuation range, making it favored by South Korean investors. In addition to the Science and Technology 50 ETF, several specific technology sector targets have also received increased positions from South Korean investors recently. South Korean investors have a net inflow of $3.4112 million in the Huaxia CSI 5G Communication Theme ETF in the past month. A large fund research analyst told reporters that the 5G sector is currently experiencing a key investment opportunity, with the continuous iteration of AI large models and computing power networks significantly boosting the demand for high-speed communication, driving the overall prosperity of the 5G industry chain, emphasizing clear industry growth momentum. Additionally, in the Chinese 5G industry chain, some high-quality targets in specific sub-sectors have no similar counterparts in the South Korean market, making them somewhat scarce and therefore attractive to South Korean investors. Furthermore, companies such as Zhongji Innolight, Suzhou Everbright Photonics, and Shennan Circuits in the optical module, semiconductor, and PCB sectors have also received net inflows from South Korean investors in the past month. Industry analysts point out that in the context of escalating geopolitical conflicts, the Chinese technology industry chain has unique advantages such as strong independent controllability and supply chain stability, and China's energy supply security is significantly better than that of the South Korean market, making it highly attractive to South Korean investors. In addition, although Chinese technology stocks have accumulated a certain level of gains in the past, the overall valuation of the technology sector is still in a reasonable range, and with the continuous growth of corporate profits and gradual digestion of valuations in the future, the safety margin of assets will be further improved. This article was reprinted from "Cailian News", author: Li Di; GMTEight Editor: Feng Qiuyi.