Guotai Haitong: Rising profit effect, foreign capital inflows into A-shares and Hong Kong stocks.

Guotai Haitong released a research report stating that market trading activity declined this period, while the profit effect rose marginally. From the capital perspective, margin funds flowed in slightly, ETF funds flowed out slightly, new issuances of equity-biased public funds rose marginally, and foreign capital flowed into A-shares and Hong Kong stocks. The main views of Guotai Haitong are as follows: Market pricing status: Market trading activity declined, while the profit effect rose marginally. 1) Market sentiment (declined): This period's market turnover rate fell, the daily average turnover of all A-shares dropped to 1.8 trillion, the daily average number of limit-up stocks fell to 61.6, the maximum number of consecutive limit-ups was 4.8 boards, and the sealing rate rose to 71.2%; 2) Profit effect (rose): This period's proportion of rising stocks rose to 56.3%, and the median weekly return of all A-share stocks rose to 0.7%; 3) Trading concentration: This period's trading concentration of both primary and secondary industries rose. This period, the historical percentiles of turnover rates for agriculture, forestry, animal husbandry and fishery, and commerce and retail industries were above 90%, and no industry's turnover rate was above 99%. A-share capital flows: This period, margin and foreign capital flowed in, while ETF funds flowed out slightly. 1) Public funds: This period's new issuance scale of equity-biased funds rose to 14.62 billion shares, and the overall equity position of public funds declined; 2) Private funds: The September private fund confidence index rose 6.5% from August, and positions declined marginally from the previous period (as of 8/14); 3) Foreign capital: Inflows were 290 million USD (as of 9/16), and the historical percentile of Northbound capital's trading share (MA5) rose to 68.0%; 4) Industrial capital: This period's IPO initial public offerings raised 3.91 billion yuan, the scale of private placements was 9.85 billion yuan, and the scale of restricted share unlocking in the next period is 15.11 billion yuan; 5) ETF: Passive funds shifted from inflows to outflows, with a net outflow of 5.87 billion yuan this period, the passive trading share rose to 6.8% period-on-period, and the industry trading concentration CR5 rose; 6) Margin: This period's net buying amount rose to 7.27 billion yuan, and the share of margin trading in A-share turnover rose to 8.6%; 7) Retail investors: Alternative indicators show that retail investor activity declined marginally this period. A-share industry allocation: ETF funds flowed into banks, and margin funds flowed into electronics. 1) Foreign capital: (as of 9/16) This period, primary industries generally saw outflows, with electronics (-38.6 million USD)/non-ferrous metals (-16.2 million USD) leading net outflows; 2) Margin: (as of 9/17) This period, electronics (+6.78 billion yuan)/building materials (+1.59 billion yuan) led net inflows, while pharmaceuticals and biologics (-1.18 billion yuan)/non-bank financials (-660 million yuan) led net outflows; 3) ETF: Passive funds had a net outflow of 5.87 billion yuan at the industry level, with banks (+1.31 billion yuan) and telecommunications (+660 million yuan) leading net inflows, while electronics (-8.55 billion yuan) and pharmaceuticals and biologics (-720 million yuan) led net outflows; among secondary industries, communications equipment (+700 million yuan) and joint-stock banks II (+520 million yuan) led net inflows, while semiconductors (-8.32 billion yuan) and software development (-400 million yuan) led net outflows. This period, indices with leading increases in holdings included CSI 500 and SSE 50; indices with leading redemptions included STAR 50 and semiconductor materials and equipment. This period, the CSI Semiconductor Materials and Equipment Theme ETF/SSE STAR Market Semiconductor Materials and Equipment Theme ETF saw net margin buying, while the CSI Short-Term Financing ETF/CSI Innovative Drug Industry ETF saw net margin selling. Hong Kong stocks and global capital flows: Southbound capital net inflows decreased, and global foreign capital flowed marginally into the U.S. market. This period, the Hang Seng Index closed down 0.2%, global markets fell more than they rose, and the Dow Jones Industrial Average led declines. Capital dimension: 1) This period's southbound capital net buying amount fell to 12.01 billion yuan, at the 34th percentile since 2022 (MA5); 2) This period (as of 9/16), developed markets saw active/passive net inflows of -2.81 billion/79.18 billion USD, and emerging markets saw active/passive net inflows of -1.34 billion/3.94 billion USD. Looking only at the foreign capital measure, this period global foreign capital flowed marginally into the U.S. market, with the U.S. ranking first in inflow scale. Looking at overall flows including domestic capital from various countries, the U.S. and China received inflows, and the U.S. shifted from outflows to inflows. Global funds saw increased net subscriptions, and North American funds shifted from outflows to inflows. Risk warnings: Deviations in data statistical calibers; data measurement errors; risk of deviations in data obtained from third-party institutions.