Last week (September 19-September 23), the market shock adjustment. At the same time, northbound funds staged a flight. Except last Monday, there was a net outflow of northbound funds for four consecutive days, with a total net outflow of 6.134 billion yuan a week.

Northbound funds, also known as smart funds. Generally speaking, the trend of northward funds has a significant effect on the choice of industry. Therefore, the attitude of northward funds towards the industry also has a certain reference value for investors in the secondary market.

Which stocks have been "abandoned"?

Data show that last week, the net outflow of northbound funds exceeded 6 billion yuan, and more than 900 stocks were "abandoned" by northbound funds, of which 38 stocks were reduced by more than 10 million shares.

Specifically, 62.0207 million shares of BOE A were reduced, while Vanadium and Titanium shares and Aluminum Corporation Of China Ltd were reduced by 5361.27 shares and 48.5229 million shares respectively, as well as Zijin Mining Group, China Merchants Steamship, Ping an Bank, Nanshan Aluminum, Oriental Wealth, and so on.

Among them, Guizhou Moutai is the stock with the highest amount of northward capital reduction. Data show that last week, northward funds reduced 671700 shares in Guizhou Moutai, with a reduction amount of 1.244 billion yuan; Wuliangye on the same track was also slightly net sold by northward funds of 139 million yuan.

Since 2021, the liquor sector has been retreating for more than a year, and many investors have gradually shunned the sector. Beixiang funds once again sold liquor leading stocks on a large scale, which can not help but make investors worry about the future of the liquor sector.

However, for the follow-up trend of the liquor industry, many institutions are relatively optimistic. CITIC judged that the leading company is conservatively expected to have a compound rate of return of more than double digits in the next 2-3 years.

It is worth mentioning that the private equity boss Dan Bin, who was once "short", revealed the investment trend in the recent data, and greatly increased the position of liquor and the Internet in the second quarter.

It is reported that the top 10 heavy stocks of No. 1 Dongfang Harbor in Yinhe Jinhui are liquor stocks such as Guizhou Moutai, Wuliangye, Gujing tribute Liquor, Shanxi Fen Liquor, and Internet stocks such as Tencent and Meituan. And Changan Automobile, Ningde era, and so on.

Which stocks have been "bottomed out"?

The net outflow of 6.134 billion yuan does not mean that northward funds are not optimistic about A shares at all, although many core assets have been sold on a large scale, but some stocks have ushered in the "bottoming" purchase of northward funds.

Data show that this week, Beixiang funds increased the market value of their positions in four stocks by more than 500 million yuan, leading the increase in the market value of positions in Tianqi Lithium Industry, Satellite Chemistry and Ningde era, with positions increasing by 1.142 billion yuan, 688 million yuan and 672 million yuan respectively. Baofeng Energy, China Construction, Daqin Railway, Changan Automobile and other northward funds have greatly increased their holdings.

It is worth noting that lithium resource stocks are very popular. Tianqi Lithium Industry tops the list with a net purchase of 870 million yuan, while Ganfeng Lithium also gets a net purchase of 270 million yuan.

Northbound funds favor lithium resources stocks, mainly optimistic about the prosperity of the new energy sector.

In recent years, with the vigorous development of new energy vehicles, energy storage and other industries, the demand for lithium battery materials and lithium battery equipment shows a growing trend, so the sales price of lithium products has increased significantly, and led to a great increase in the performance of upstream lithium enterprises.

But investors are increasingly confused about the lofty demeanor of the lithium mining industry. However, recently, including East Asia Qianhai Securities, Huaxi Securities, Bohai Securities, Haitong International, Minsheng Securities, CITIC Construction Investment and other institutions have expressed optimism about the future price of lithium carbonate.

Ping an Securities believes that the mismatch of upstream and downstream production cycles is the fundamental reason why supply is difficult to respond quickly under the outbreak of lithium demand. Under the shortage pattern, the resource side is still an important variable of the future lithium price trend. At present, the gap between supply and demand superimposed cost support upward, lithium prices still have some upward space.

In addition to lithium resources, the communications sector has also received northward funds to increase its positions against the trend, ranking first by 2.45%. Of these, China Telecom Corporation received 47.4143 million northward funds to increase its positions, with an increase of 299.66%; China Unicom received more than 17 million shares to increase its holdings; and China Mobile Limited also increased its positions by nearly 60%.

In addition, the banking sector received a substantial increase in northward capital holdings, leading by an increase of 198 million shares, of which Jiangsu Bank and Bank of China Ltd. received a larger increase in the number of shares; northward funds increased their holdings in basic chemicals and automobiles by more than 1 per cent.

The inflow of foreign capital is still a long-term trend

Industry insiders said that the continued outflow of northbound funds is mainly disturbed by overseas factors. In the era of economic globalization, opening up and financing is an irresistible historical trend, so the attitude of foreign investors optimistic about China's economic future remains unchanged.

First, the long-term trend that China's economy is stable and improving. The Chinese market has become the "main engine" of the performance growth of many well-known multinational corporations. The strong resilience and vitality shown by the Chinese economy has become the key to stabilizing the confidence of foreign investors in the Chinese market.

Second, the proportion of foreign investment is still relatively low. According to estimates by market institutions, China's assets will account for between 5% and 10% of the three major indices, ranking first among the assets of emerging economies included. However, compared with the level of neighboring Japan and South Korea, the proportion of domestic financial assets held by foreign investors is still low, and there is plenty of room to increase their holdings.

Third, China persists in opening wider to the outside world. At present, China is speeding up the construction of a new development pattern with the domestic great cycle as the main body and the domestic and international double cycles promoting each other, so as to accelerate the pace of opening up to the outside world at a higher level. This demonstrates China's sincerity and determination to expand the cake of mutual benefit and win-win results, and will continue to attract more and more foreign investment into China.

From a comprehensive point of view of various factors, the fundamentals of China's long-term economic improvement have not changed, China's investment environment will also attract continuous inflows of foreign capital, and the inflow of foreign capital into A-shares is still a long-term trend.