HTSC: The funding situation is still in a plateau period, and the trading heat of dividend transactions has risen to nearly a one-year high

According to the latest report from Huatai Securities on Zhitong Finance APP, the market's risk appetite has declined recently, but high-frequency data shows that the funding situation is still in a plateau period: ① Foreign capital and margin financing were the main net outflows last week, with foreign capital flowing out of household appliances/food and beverage, and margin financing flowing out of electronics/power equipment, ② Retail investors/ETFs/industrial capital are the main support for funds, with ETF net inflows reaching nearly 40 billion (the highest weekly net inflow since the Spring Festival), and broad-based ETFs being the main net inflows (with Shanghai and Shenzhen 300/CSI 500 net inflows leading), share repurchase plans (10WMA) reaching a new high since 2010, ③ Structurally, the heat of dividend trading (transaction volume ratio) has risen to the 90th percentile in nearly a year, with potential incremental funds coming from margin financing and insurance capital, TMT positions falling to the 80th percentile since last year; ④ QDII ETF has seen three consecutive weeks of net inflows, with the premium rate for investing in US stocks reaching the highest level since 2023.

Key points from Huatai Securities:

Foreign capital continues to net outflow, QDII ETF has net inflows exceeding 1.5 billion for three consecutive weeks

Last week, northbound funds had a net outflow of 11.762 billion yuan, continuing the net outflow trend, with trading activity rising to 8.0%. Measuring the level of net inflows of trading-type foreign capital using northbound funds vs. EPFR data, from June 20, 2024, to June 26, 2024, trading-type foreign capital had a net outflow of 80.3 billion yuan, the main outflow for this period. Configuration-type foreign capital outflows expanded, structural differentiation continued, with active configuration-type foreign capital continuing to have a net outflow, with a net outflow of 1.46 billion yuan in the previous period, while passive configuration-type foreign capital had a net inflow of 0.47 billion yuan, narrowing the net inflow. In terms of direction, last week, the main industries where foreign capital increased their positions were non-ferrous metals, utilities, and transportation, while reducing their positions in food and beverage, household appliances, and electronics. QDII ETF has seen net inflows exceeding 1.5 billion for three consecutive weeks, mainly flowing into the US, Hong Kong, and other directions, with the ETF premium rate rebounding.

Long-term funds entering the market provide support for the funding situation, and the risk of margin financing liquidation is controllable

In terms of short-term funds, retail funds had a net inflow of about 10.2 billion yuan last week, turning to a net inflow on a month-on-month basis; margin financing had a net outflow of 21.56 billion yuan, with trading activity slightly falling to 8.24%. In terms of liquidation risk, the average collateral ratio in the market last week was 242.5%, close to the warning line (240%), but not yet close to the liquidation line. Structurally, margin financing saw a net inflow in coal and net outflows in electronics, non-ferrous metals, food and beverage, and other industries. In terms of long-term funds (industrial capital & repurchase & broad-based ETF), ETFs and repurchases provide stable market support for the funding situation, with ETFs seeing a net inflow of nearly 40 billion yuan last week, broad-based ETFs being the main inflows, repurchase plans totaling 13.2 billion yuan last week, with repurchase amounting to 14 billion yuan, both showing an expansion in scale compared to the previous period. In addition, industrial capital saw a net reduction of 0.44 billion yuan last week, with the net reduction scale narrowing on a month-on-month basis.

Private equity fund market entry intentions are rising, and supply-side pressure has increased month-on-month On the fund side, last week saw the establishment of 6.78 billion shares of equity-oriented funds. The equity positions of stock/mixed funds remained relatively stable on a month-on-month basis, at 84.8% and 83.6% respectively. Overall, the issuance of public funds remains sluggish, with a noticeable increase in the proportion of bond funds issued recently. Private fund market entry intentions have shown some recovery. According to Huar