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the long-awaited countdown to the opening of the national day holiday has entered. after witnessing the history of multiple indicators of a-shares before the holiday, a consensus has been formed to continue the surge. where do the huge amounts of money come from before the holidays? how powerful is this wave of buying?

first of all, since the unexpected policy was launched on september 24, market trading volume has been rising steadily and has continued to set short and medium-term records.

wind data statistics show that in the five trading days from september 24 to 30, the total turnover of the a-share market reached 7.37 trillion, of which 4 trading days exceeded one trillion. on september 25, the turnover of the shanghai and shenzhen stock markets exceeded rmb 1 trillion since may 6; on the 27th, the three consecutive trading days exceeded rmb 1 trillion for the first time in a long time; on september 30, within 35 minutes of the opening, the volume of transactions in the two cities the transaction volume exceeded one trillion, setting a new record for the fastest trillion in history. at the close of the day, the transaction volume of the two cities exceeded 2.36 trillion, setting a new record for the highest transaction volume in history set on may 28, 2015.

secondly, the core index rose astonishingly.

many indexes took five trading days to recover their losses for the year. the gem 50 index led the way with a five-day increase of 43.91%. the science and technology innovation 50 index and the shenzhen stock exchange component index surged 35.66% and 30.26% respectively. the csi 500 index, csi 1000 index, csi 300 index and shanghai composite index all rose by more than 20%.

behind the huge volume of transactions and huge rises is the strong force of long selling. so the question is, where does the huge amount of money come from? how could a powerful synergy be formed in such a short period of time?

force 1: etf funds were bought by 114.9 billion in 5 trading days

there is no doubt that etf is one of the most convenient tools for investors to enter the market. the boss of a branch of a securities firm said with emotion that we can just buy etfs!

in the five trading days since the introduction of the unexpected policy (september 24-30), stock etf trading has been booming, with a total turnover reaching 643.174 billion yuan and a total net capital inflow of 114.915 billion yuan. many etfs and lof funds bought more and saw higher premiums during the session.

the changes in etf funds in the first three quarters of this year have been released, and the net inflow of stock etf funds during the year totaled 877.562 billion yuan. the latest scale of domestic etfs is 3.02 trillion, breaking through the 3 trillion mark for the first time, an increase of 47% from the beginning of the year.

among them, the latest size of the huatai-berry csi 300 etf, the largest a-share etf, has reached 397.545 billion. according to industry predictions, if nothing unexpected happens, it will successfully exceed 400 billion on the first day of trading after the holiday.

the scale growth of huatai-berry csi 300 etf is a history of domestic investors’ awareness of etfs. this etf was established on may 4, 2012. it is the first cross-market etf in china. the etf became the first stock etf in the market to exceed 100 billion yuan on august 7, 2023. from its establishment in 2012, it has reached a scale of 100 billion yuan. it took 11 years; on march 12 this year, it took 7 months to break through from 100 billion to 200 billion; from 200 billion to 300 billion, it only took 5 months; and after the scale exceeded 300 billion on september 24 , it only took 2 trading days to rush to the 350 billion mark, or reach a new high of 400 billion in 6 trading days.

some people from fund companies commented that in recent years, etf investment has gradually gained popularity due to its characteristics of transparency, flexibility, and low fees. combined with this market situation, the index has increased significantly, and the characteristics of investors using the index to enter the market have become more distinctive, and etfs can be predicted. it truly ushered in an era of prosperity.

in addition to individual investors, insurance funds and private equity are also buying etfs. judging from the data of the second quarter report, in the first half of this year, a total of 225 private securities funds appeared in the list of the top ten holders of 200 etfs, holding a total of 3.94 billion etf shares, an increase of more than 100% year-on-year.

force 2: medium and long-term funds enter the market, and underweight domestic institutions cover their short positions

the entry of medium and long-term funds into the market is also an important source of incremental market funds.

the relevant person in charge of the state administration of financial supervision stated at a press conference of the state council information office on september 27 that insurance funds currently invested in stocks and stock funds exceed 3.3 trillion yuan. a reporter from cailian news consulted the data of the "china insurance asset management industry development report (2024)" disclosed by the china insurance asset management association and learned that as of the end of 2023, the total scale of direct investment of insurance funds in stocks and public funds (stocks and hybrids) was 2.69 trillions. based on this rough estimate, since this year, the scale of insurance investment in stocks and stock funds may have increased by 22.68%, an increase of 600 billion yuan during the year.

however, various data show that before this bull market, the allocation proportion of equity assets by domestic institutions was still at a historically low level. according to a research report by industrial securities securities, in terms of insurance funds, as of the end of august 2024, the balance of insurance funds used was 31.8 trillion yuan, of which 3.3 trillion yuan was invested in stocks and stock funds, accounting for only 10.4%.

in terms of private equity, according to calculations by china resources trust, as of the end of august 2024, the stock private equity position was 48.45%, which is also at a historical low. in terms of public offerings, although the position size is not low due to regulatory requirements, the scale growth has slowed down significantly in recent years. as the market recovers in the future, fund issuance is also expected to pick up.

this means that in the future, if the market rises at any time, subsequent scale growth and rising positions are expected to drive incremental entry into the market.

force three: foreign capital returns to chinese assets

tracking by many securities firms such as citic securities and industrial securities strategies shows that foreign capital is rapidly returning. significantly increasing allocation to hong kong stocks is one of the market trends.data show that foreign capital has inflowed a total of hk$60.6 billion in hong kong stocks in just half a month since september 16.

in the past week, foreign investors have accelerated their efforts to build positions in chinese assets, with jpmorgan chase’s trading seats accumulating more than hk$8 billion in purchases. china merchants bank, ping an of china, china pacific insurance, byd h, zijin mining, conch cement and other foreign-funded aesthetic stocks are among those to be scanned.

recently, foreign capital has shifted from covering short positions to actively doing long positions, and has become the main force driving the surge in hong kong stocks. for a-shares, foreign capital inflows have slowed down significantly in recent years and even experienced outflows, which is far less than the average annual scale of more than 3,000 from 2018 to 2021. foreign capital's allocation to a-shares has also fallen to a historical low. recently, we have seen the resonance of long-term buying by foreign investors and short-selling funds. in the medium to long term, the replenishment of foreign investment positions will drive funds to continue to flow back into china.

there are early signs of a change in the direction of foreign investment.

bridgewater stated in a view released at the end of june that under the current economic situation, chinese risk assets are more attractive than other major economies. taken together, china is likely to maintain loose policies for a relatively long period of time. if economic growth slows significantly, policymakers have plenty of room to ramp up stimulus. this will most likely result in positive returns on risky assets relative to cash.

therefore, bridgewater’s u.s. stock holdings were disclosed at the end of the second quarter. data show that as of the end of the second quarter, the total market value of bridgewater’s u.s. stock holdings was us$19.2 billion, a decrease of us$600 million from the previous quarter.

it is worth recalling that on august 29, he lifeng, member of the political bureau of the cpc central committee and director of the central finance office, met with dalio, founder of bridgewater associates, in beijing. at that time, dalio said that he was optimistic about china's development prospects in the long term and was full of confidence in china's future.

force 4: money from bank financial management and debt funds flows to the equity market

under the seesaw effect of stocks and bonds, the structure of capital allocation has differentiated.

recently, there has been a significant increase in the redemption of debt-based funds by institutions. on the one hand, it is due to the understanding of profits. on the other hand, some market views believe that under the unexpected easing policy, institutional investors’ judgments on the stock and bond markets have changed, and it is inevitable that the exclusion focuses on increasing the layout in the equity market.

the data on icbc bank-securities transfers can provide a more intuitive sense of the signs of ordinary investors moving from bank financial management to stock market funds.

data shows that from september 24 to september 30, the icbc bank-securities transfer index was 2.15, 1.40, 4.40, 7.04, and 16.71 respectively, of which the individual investor indexes were 1.19, 1.87, 1.08, 5.20, and 16.92 respectively. the number of individual investors has increased significantly, and their styles have become more aggressive.

what additional funding will be available in the future?

throughout the national day holiday, the stock market has become a topic of discussion on the streets, especially the hong kong stock market, which opened on the 4th and surged for three days. a-share investors can’t wait for the market to open.

brokerages have been busy throughout the holidays. many brokerages started on the 6th, and their wealth and brokerage lines, including brokerage firms, held pre-market mobilization meetings to fully resume operations. there is only one main task at the beginning: opening an account. incomplete statistics from the financial association show that the number of accounts that have been opened may have reached millions, and more investors are queuing up to wait for account opening review and verification. china clearing has opened channel permissions such as the unified account platform and identity information verification system in advance to facilitate advance preparations by brokers and others. however, new applications for securities accounts during the national day will still have to wait until october 8 to be completed, and normal transactions will not be allowed until october 9.

in addition to foreign capital and institutional funds, what other incremental funds are worth looking forward to next?

first of all, starting tomorrow, the market will welcome new investors who opened accounts before september 30.the industry pointed out that among the new account openings this time, online account opening has a significant advantage, which may be mainly due to the fact that the current internet user group is generally younger. the post-90s and post-00s are the main subjects of recent account openings. nearly 70% of the new account openings are from the post-90s and 00s.

in order to improve trading efficiency, the shanghai stock exchange issued the "notice on extending the time for accepting designated transaction declaration instructions". starting from october 8, the time for accepting designated transaction declaration instructions will be from 9:15 to 9:25 and 9:30 on each trading day. to 11:30 and 13:00 to 15:00 will be adjusted to 9:15 to 11:30 and 13:00 to 15:00 on each trading day.

a securities firm has notified customers that in order to meet the bank-securities transfer needs of customers after the holiday, it has contacted relevant banks to open bank-securities business hours in advance. the banks mentioned by the securities firm with third-party custody business include bank of china, agricultural bank of china, bank of communications, china merchants bank, and citic , shanghai pudong development bank, minsheng, everbright, bank of ningbo, etc. have decided to open in advance from 8:30 to 8:05, and some securities firms have negotiated with banks to directly open in advance to 7:30. at the same time, some brokers have advanced the night market commission time today from 20:00 to 16:30.

secondly, the first shot of the 800 billion gift package was launched.the central bank announced at a press conference held by the state council information office on september 24 that it would create 500 billion yuan in swap facilities for securities, funds, and insurance companies to improve institutions’ ability to obtain funds and increase stock holdings; it would also create 300 billion yuan in stock repurchases and increase holdings. special refinancing guides banks to provide loans to listed companies and major shareholders, and supports the repurchase and increase of stock holdings.

subsequently, regulators in many places held symposiums on listed companies to explore the establishment of special refinancing matters for stock repurchases and holdings increase. before the holiday, many listed companies said that regulators had sent them a form requiring them to fill in a loan application form to repurchase the quota.

on october 6, bairen medical announced that the controlling shareholder and actual controller jin lei planned to use special loan funds to increase its holdings by 100,000 to 2.13 million shares, and the first special re-loan for stock repurchase and increase in holdings was implemented.