news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

[Introduction] ST sector becomes a hot spot for speculation by niche funds, but fund managers still stay away

China Fund News reporter Zhang Yanbei and Sun Xiaohui

ST stocks, which had previously collectively staged a limit-down trend, have quietly entered the limit-up mode since the second half of the year.

Wind data shows that many ST stocks have been hitting the daily limit for more than a month, with some stocks going from the lower limit to the upper limit and from the upper limit to the lower limit.

Industry institutions believe that in the context of the lack of investment hotspots in the A-share sector, the ST sector, which actively protects its listing status, has become a hot spot for speculation by niche funds, but the daily limit surge is a short-term speculation that is difficult to sustain, and investors should be wary of risks. As institutional investors, public funds are still cautious about the ST sector.

ST sector performed actively

Maintaining listing status may be the main driving factor

Since the second half of this year, the ST sector has been active, with the largest increase in the relevant index reaching 15%, and many popular stocks have staged a multi-day rally. Among these ST stocks, there are many stocks in the pharmaceutical and biological, public utilities, and construction and decoration sectors.

For example, *ST Jingfeng has seen 26 consecutive daily limit increases, and its share price has soared nearly 2.4 times since the second half of the year. As of August 15, *ST Furun, a stock at high risk of delisting, recorded 13 daily limit increases in 17 trading days, with a cumulative increase of 85.23% and a total turnover rate of 52.85%. In addition, Wind data shows that ST Lingda, *ST Jiyao, *ST Jiayu and other stocks have increased by more than 100% in the past month, and there are as many as 28 ST stocks that have increased by more than 30%.

What is the main logic behind the recent recovery of the ST sector? Is there a continuous money-making effect? ​​Or is it just a collective "redemption"? According to the analysis of the head of equity investment of a small and medium-sized fund company, the main driving factor of this round of ST market is that many major shareholders of ST stocks have a strong desire to keep their shells. As the difficulty of IPO increases, shell resources become scarce, and the necessity of keeping their shells is also increasing. Based on this logic, some ST stocks have a certain gaming value.

A fund company researcher in South China said that this round of ST stock rebound is mainly due to speculation, and the important logic behind it is the recent changes in the policy environment. Specifically, the regulatory authorities have strengthened their support for the market, and some ST stocks have received positive market responses after announcing restructuring plans or introducing strategic investors. Coupled with the current poor market sentiment, hot money has turned its attention to listed companies that are expected to maintain their listing status.

Publicly offered funds are becoming more cautious in investing in ST stocks

Since the beginning of this year, the number of ST or *ST stocks held by funds has continued to decrease, and fund managers are keeping their distance from the ST sector.

According to Wind statistics, as of the end of the first quarter of this year, there were 11 ST or *ST stocks heavily held by public funds, but by the end of the second quarter, only one remained.

The above-mentioned equity manager said that based on a strict risk control system, most public funds generally take an evasive attitude towards individual stocks with weak fundamentals. The decline of small-cap stocks since the beginning of this year will make public funds more inclined to value investing.

He further introduced that public fund investment research is mainly based on fundamental investment, and mainly selects high-quality companies with high industry status, high profit quality and growth potential. Since most ST stocks are implemented due to various negative factors such as uncertainty in their ability to continue operations, financial fraud, obviously insufficient dividends, and weak internal control, fund companies have clear investment restrictions on such stocks, or they cannot enter the company's stock pool, or they are directly included in the prohibited pool.

"If you have to invest, you need the consent of the company's investment committee. Fund managers will not act easily unless they are very sure. Therefore, there are few participants in this market situation, such as public funds with stricter compliance and risk control," he said.

Even though the ST sector has performed well recently, public fund managers are still very cautious about it. One fund manager said bluntly, "This surge in ST stocks without any favorable conditions is just speculation. There are companies with real restructuring value among ST stocks, but you can't make every penny in the market. In the case of risks, although there may be other benefits, the uncertainty is increasing, so there is no need to hold on."

Some fund managers from small and medium-sized fund companies also stated that in recent years, their companies have implemented strict risk control in equity investments and set up a comprehensive risk monitoring and early warning procedure for listed companies to help prevent investment risks.

"For example, in terms of stock selection, we always take a more cautious attitude towards companies with a market value of less than 5 billion yuan. The company has established a strict multi-level investment stock pool management system. Stocks with potential negative impacts, delisting expectations, poor performance, regulatory warnings, and insufficient liquidity, such as ST stocks, will not enter the company's stock pool, and the investment portfolio will not invest in such risky stocks to avoid the situation where stocks cannot be sold in time after purchase." said the fund manager.

Another fund manager believes that this year's market style prefers large-cap stocks. From the perspective of net profit, the profits of index constituent stocks such as the Shanghai Composite 50 and the CSI 300 are relatively stable, and they are more likely to be favored in a market with high uncertainty.

Editor: Captain

Review: Xu Wen

Copyright Notice

"China Fund News" enjoys the copyright to the original content published on this platform. Reproduction without authorization is prohibited, otherwise legal liability will be pursued.

Contact person for authorized reprint cooperation: Mr. Yu (Tel: 0755-82468670)