Foreign Capital Trickled Into A Shares Rose 15% In March

"Although A shares are in an environment of slowing economic growth and declining corporate profits, the continuous admission of capital has brought exponential prosperity."

On the afternoon of November 26th, Chen Li, deputy director and chief strategist of China Securities Research at UBS Securities, said that the Shanghai Composite Index and Shanghai and Shenzhen 300 index at the beginning of 2015 saw 2900 and 3000 respectively.

Chen Li predicts that the liquidity of A shares will remain positive before the Spring Festival next year, and will boost the market rapidly.

But after the rapid rise of the market, the future bull market can really be formed. There are two aspects to be observed. One is whether there is any sign of stabilization in China's economy, and the two is whether the downside risk of stock supply appears.

Chen Li said, along with

With the increase of activity, it is estimated that the magnitude of A shares will increase significantly next year, and at the beginning of next year there will be a discussion on the draft of the registration system reform and the possible pfer boards of the more than 1300 new three Board companies, which may have some unfavorable effects on the market in the coming time period in.

In addition, for this round of Shanghai Securities Market in the overall outbreak of the brokerage sector, Chen Li said that the logic behind the surge is mainly that the market's activity is more advantageous to the securities companies.

As well as on the market for the future development of brokers, many policies are expected to further enhance the valuation space, such as stock options, stock index options, large stock T+0 and so on.

However, due to the very small amount of investment from the south, Shanghai and Hong Kong itself has limited domestic brokerage performance.

"Brokerage stocks"

It may continue to the beginning of next year, but the valuation of A share brokers is not cheap, and the net market rate is already a relatively high level globally.

Chen Li said.

In terms of Shanghai and Hong Kong, UBS believes that the first week of operation basically meets expectations. Although initial funds are limited, it is expected that overseas funds will continue to flow into the A share market in the future.

"It is certain that Shanghai and Hong Kong will have a net inflow of funds in the north and overseas funds.

It will be a trickle, but it will not be large in the short term.

The south direction is indeed worse than we think. Of course, there are some technical reasons, but we believe that with the efforts of regulators, the future will slowly rise. "

Chen Li said that the major foreign investment oriented high score red and blue chip stocks are the investment themes recommended by UBS.

UBS believes that in the future, with MSCI, FTSE and other index companies joining A shares, the expansion of Hong Kong and Shanghai trading products and the RMB's basically free convertibility in 2020 will enable overseas capital to continue to flow into the domestic market.

In addition to the large high score blue and blue chip stocks, UBS also recommends three major investment themes: real estate, state-owned enterprise reform and China's "going out" industry.