AIFMC Fund Market Review 20151109
Date:2015-11-10

AIFMC Fund Market Review 20151109.pdf

 AIFMC Weekly China Fund Market Review

Week of 2015.11.09

News Review

 

1.      Beijing, Seoul sign 17 deals, boost economic partnership

China and the Republic of Korea moved toward a closer economic partnership with deals to synchronize development strategies and speed up the ratification of a bilateral free trade agreement. The two sides agreed on Saturday to launch a direct transaction market for their currencies in Shanghai, according to a statement released by the People's Bank of China. China also supported the ROK in a plan to issue a yuan-denominated bond in China's debt market. Beijing also decided to expand the renminbi qualified foreign institutional investor quota, commonly known as the RQFII quota, held by Seoul to 120 billion yuan ($18 billion). Premier Li Keqiang and President Park Geun-hye witnessed the signing of 17 deals after a one-on-one meeting at the presidential Blue House in Seoul. The two sides agreed to synergize economic development strategies, especially on innovation and the upgrading of the manufacturing sector, to encourage better understanding of each other's policies. They also agreed to encourage more cross-border projects among businesses.

 

2.      Shenzhen-Hong Kong connect false start sparks stock rally

Hong Kong Exchanges and Clearing briefly became the world’s most valuable bourse by market capitalisation on Wednesday after an article posted online by Zhou Xiaochuan, the head of the People’s Bank of China, appeared to confirm that a stock link between Hong Kong and Shenzhen would begin by the end of this year. HKEx has long acted as a proxy for Chinese markets, aided for the past year by the launch of the Shanghai-Hong Kong Stock Connect — the first direct link between international investors and mainland markets. This year China’s stock market rally made HKEx the best-performing blue-chip in its own market as investors treated the bourse operator as a proxy for the mainland. Trading volumes in Hong Kong reached record levels this year, boosting the HKEx, which makes more than half its revenue from cash equities trading in its home market, where it has a monopoly. Investors are eagerly awaiting a link to Shenzhen because the southern exchange is home to more tech start-ups and biotech groups than Shanghai.

 

3.      The return of IPOs pushes the market to return to normal

The CSRC said on last Friday that it will resume IPOs in the A-shares market. It is widely understood by market professionals that the return of IPOs will not purposefully give the market another round of rally but is an important step to stabilize, fix and build the market. The return of IPOs helps facilitate the linkage between the capital market and the real economy. In general, the impact on the A-shares market will be relatively positive. The change of subscription rules may further decrease the price differentials between the primary and the secondary markets, while the high popularity of IPO shares will continue, further lowering the subscription winning rate.

 

There are several rule changes. Firstly, the subscription prepayment requirement is cancelled, which will increase fund utilization and limit the liquidity impact due to the large amount of locked prepayment funds. In addition, the negative impact on money market funds from IPO subscription will be tremendously lowered. Secondly, online investors will subscribe through their security trading platforms, which increases investors’ allocation in secondary market stocks as well as market vitality. Thirdly, the direct pricing mechanism for small-cap stocks lowers the financing cost for small and medium sized companies and increases issuing efficiency. During the heat of market rally in the first half of this year, IPO shares returned about 500%. With the heated popularity, the IPO subscription winning rate and IPO share returns both continued to decrease. Under the current market environment, IPO holding period return will be further lowered. The risk free returns of IPOs will be significantly lowered.

 

Market Fundamentals

 

Last week, Shanghai Stock Exchange and Shenzhen Stock Exchange both rallied. Shanghai Composite Index closed at 3590.03, up by 207.47, or 6.13%. Shenzhen Component Index closed at 12273.35, up by 727.30, or 6.30%. CSI 300 Index closed at 3793.37, up by 259.30, or 7.34%. ChiNext closed at 2661.41, up by 183.14 or 7.39%.

Small-cap stocks underperformed its large-cap equivalents, as CSI 100 rose by 7.47% and CSI 500 rose by 5.11%. According to CITIC Securities last week, 29 of 29 industries were closed in positive, of which non-bank finance, catering & tourism and construction had the best performances of 19.64%, 10.25% and 9.06%, respectively; food & beverage, electric equipment and pharmaceutical had the lowest gains of 3.17%, 3.36% and 3.80%, respectively.

Last week, S&P/CITIC Composite Bond Index closed at 1556.92, down by 0.10%.

Last week, Dow Jones rose by 1.40%, and S&P 500 rose by 0.95%. Meanwhile, Dow Jones Euro 50 rose by 1.18%. Major Asia markets posted gains last week, with NIKKEI 225 up by 0.96% and Hang Seng up by 1.00%.

 

Last Week’s Index performance (Week Ending 2015.11.06)

Name of Index

Index

Change (%)

Shanghai Composite Index

3590.03

6.13

CSI 300 Index

3793.37

7.34

Shenzhen Composite index

12273.35

6.30

SSE Fund Index

5923.45

2.32

SZSE Fund Index

7654.69

5.96

CSI 100

3443.43

7.47

CSI 500

7446.85

5.11

DJIA Index

17910.33

1.40

S&P 500 Index

2099.20

0.95

Dow Jones European 50 Index

3254.11

1.18

DAX Index

10988.03

1.27

CAC40 Index

4984.15

1.77

FTSE 100 Index

6353.83

-0.11

RTS Index

854.34

1.04

Nikkei 225 Index

19265.60

0.96

Hang Seng Index

22867.33

1.00

Korea Composite Index

2041.07

0.57

Sensex 30 Index

26265.24

-1.47

S&P/CITIC Composite Bond Index

1556.92

-0.10

Treasury Bond Full Price Index

120.86

-0.28

Corporate Bond Full Price Index

103.24

-0.12

Source: Wind, Howbuy Fund Research Center

 

Last Week’s Mutual Fund Performance (Week Ending 2015.11.06)

Fund Type

Change (%)

Equity Funds

5.61

Mixed Funds

3.78

Open-end Index Funds 

6.21

Close-end Funds

1.25

Capital Guaranteed Funds

0.75

Bond Funds

0.35

Money Market Funds

0.04

QDII Funds

0.87

Source: Wind, Howbuy Fund Research Center. Note: QDII Funds as of November 5th, 2015

 

Last Week’s Industry Performance (Week Ending 2015.11.06)

20151109.png

Source: Wind, Howbuy Fund Research Center.

 

AIFMC Fund Performance (Week Ending 2015.11.06)

Symbol

English Name

YTD

Recent 1Y

Recent 2Y

Recent 3Y

Since Inception

Return (%)

Ranking

Return (%)

Ranking

Return (%)

Ranking

Return (%)

Ranking

Return (%)

Ranking

163412

Asset-Light

86.57%

7/446

93.21%

8/445

174.57%

2/421

269.68%

4/392

258.59%

3/367

163406

Herun

74.03%

17/446

100.75%

6/445

145.25%

9/421

239.89%

6/392

181.05%

2/269

340007

SRI

63.00%

44/446

61.68%

142/445

85.85%

132/421

135.64%

92/392

218.72%

1/182

340008

Organic Growth

48.10%

59/226

55.54%

65/203

105.67%

15/114

142.69%

11/82

156.94%

11/36

340006

Global View

46.75%

18/55

65.62%

11/46

86.59%

4/19

124.06%

5/17

600.50%

1/2

163402

Trend

39.31%

95/226

62.91%

51/203

97.21%

26/114

117.16%

29/82

1060.02%

1/9

163415

Business Model

48.27%

137/446

84.31%

21/445

128.43%

16/421

--

--

125.23%

134/398

163409

Green

19.11%

377/446

44.52%

306/445

77.78%

175/421

156.36%

52/392

125.60%

20/318

163411

Capital Guaranteed

15.34%

39/70

19.43%

44/66

30.35%

39/53

42.42%

19/29

42.71%

14/20

340009

Stable Bond Return

12.41%

24/164

23.57%

17/159

47.13%

4/128

50.86%

10/107

57.54%

19/59

163407

CSI 300 Enhanced

9.52%

24/38

54.98%

11/35

68.64%

12/34

81.50%

12/26

38.54%

4/15

340005

MMF

3.63%

63/396

4.39%

61/371

9.30%

83/224

13.39%

51/121

33.72%

28/36

000575

Value-added Treasure MMF

3.55%

85/396

4.29%

77/371

--

--

--

--

7.90%

52/261

340001

Convertible Bond

3.60%

68/70

33.24%

16/66

58.78%

7/53

81.42%

4/29

584.68%

2/9

001511

New Horizon

2.40%

--

--

--

--

--

--

--

2.40%

90/515

Source: Wind, China Galaxy Research