The Zhitong Finance App learned that CICC released a research report saying that in the medium term, it is still impossible to ignore the financial impact. Looking ahead to the future market, A-shares are currently in a relatively active state in history. New investors and financing accounts are the main incremental capital recently. From the data, it is inferred that institutional investors have generally risen in the past and have had time to significantly increase their positions in the future. The market may have good bearing capacity from a financial perspective, which is expected to support higher market shocks. However, considering the large cumulative increase in the previous period, the main indices are close to early highs and trading intensive areas. Most of the small and medium capitalization indices have hit new highs in the current round, and there is some pressure on the external environment. If there is a short-term concentrated return of profits, it will inevitably cause the index to fluctuate. This is also a normal phenomenon in history during the volatile consolidation period. The bank believes that the medium-term trend will not be changed.

CICC pointed out that looking ahead, after policy expectations are reversed, it is necessary to pay attention to the transmission of fundamental improvements in policy implementation. In its newly released 2025 outlook, the bank believes that the market driving force in 2024 is mainly reflected in valuation restoration. Whether 2025 can successfully switch from being driven by valuation to being driven by fundamentals is critical. At the same time, it is important not to ignore that after A-shares have experienced a long-term correction, there may be more positive marginal changes in the allocation needs of domestic residents' assets and global capital.

The stock market has been rising since late September. The performance of A-shares has been resilient under recent external shocks, which is clearly better than other domestic assets.

Since mid-late September, as macroeconomic policies have sent positive signals, investors' expectations and sentiment have improved. After showing the fastest rise since 2000, the main A-share indices have entered a period of fluctuation and consolidation. Since October, external overseas investors have been watching Trump's deal, which has had an impact on global and domestic assets. In particular, since the November 6 election results were basically settled, Trump was elected president and the Republican Party is likely to win the Senate and House of Representatives. The Hong Kong stock, RMB exchange rate, domestic commodity and treasury bond interest rates fluctuated to varying degrees. The Hang Seng Index fell below 20,000 points, the US dollar exchange rate against offshore RMB had broken 7.25, 10-year treasury bond yields fell below 2.1%, and domestic black commodities fluctuated and fell. In contrast, the major broad-based indices in the A-share market fluctuated and were close to previous highs. As of November 12, the Shanghai and Shenzhen 300 rose 5.0% in November, deviating from the growth style The GEM Index and Science Innovation 50 both rose by more than 8%. The current performance of A-shares compared to the resilience of other assets, and the bank believes that the financial aspect may be an important explanatory point of view.

A-shares are relatively active in terms of capital, which supports market performance.

Since late September, the financial side of A-shares has become active as the market recovers. Among them, the single-day turnover reached 3.48 trillion yuan on October 8, a record high, corresponding to a turnover rate of 8.6%. Since then, the market has been mainly volatile but the turnover has remained active. Since October 9, the average daily turnover of A-shares has exceeded 2 trillion yuan, corresponding to a turnover rate of more than 5% based on the market value of free circulation. It is in the most active phase of capital after 2015. Furthermore, there are differences in the trends of various types of investors within the country.

Financing balances have risen markedly and trading activity has improved.

Normally, the market financing balance is positively correlated with market performance. The A-share financing balance/free circulation market value has been stable in the 4-5% range for a long time. Since the market rose at the end of September, the financing balance has also risen markedly. On October 8, the financing balance increased by 107.5 billion yuan in a single day. However, although the general market index entered the adjustment stage after October 8, the financing balance continued to rise against the trend and accelerated since November 11. As of November 11, the financing balance had been restored to 1.83 trillion yuan, which is higher than the level of 2021, but there is still a gap between the absolute size and share of the market value of A-shares in free circulation compared to 2015. Moreover, since mid-late September, the turnover of the two financial transactions has continued to rise. At one point, it rose to 12%, indicating that high-risk capital trading sentiment in the market is quite active, and may also be an important support for the recent active small to medium market capitalization style.

Individual investors are more willing to enter the market, and the number of new accounts opened in a single month reached the third highest in history.

The center of the number of new A-share accounts has continued to decline since 2023, and there has been a significant improvement recently. The number of new A-share accounts opened on the Shanghai Stock Exchange rebounded to 6.85 million in October (vs. 1/1.83 million accounts in August/September), the third highest level in history (the first two were in April and June 2015), indicating that individual investors are currently more willing to enter the market. According to data disclosed by the Securities Regulatory Commission at the end of 2022, the share of individual A-share investors in transactions fell to about 60% [1]. It is still the largest investor category in the A-share market, and the bank expects the share of transactions to rise in the near future.

Private equity fund stock positions are still at a low level.

According to China Resources Trust's private equity product statistics, most private equity positions in history were in sync with market performance. At the end of August, stock positions were at a historically low level of around 48%. Stock positions increased 7.1ppt to 55.6% month-on-month in September, but stock positions were still significantly below the historical same point level (vs. 65.3% of some private equity positions in July 2023), and below the historical average (vs. 67% historical average). Private equity fund positions are relatively flexible. Low positions mean there is room for potential bulls if market performance continues to improve.

Public funds and northbound capital were not the main drivers of the rise, and ETF inflows in the early stages have seen some outflows recently.

In terms of public funds, active equity fund stock positions rose slightly to 86.8% in the third quarter from 86.3% in the second quarter, but equity positions declined slightly after excluding price factors. Furthermore, according to the bank's statistics, the equity positions of some high-performing public equity products since 2023 have continued to decline on average in the third quarter.

In terms of northbound capital, the bank's net inflow of northbound capital was 81.6 billion yuan from August 16 to the end of September, according to the number of shares held by Northbound Capital and the average price estimate for the period disclosed by the exchange, which was less than the same increase in history. Furthermore, judging from the total amount of northbound capital transactions and A-share turnover, this indicator has continued to decline since mid-June to around 11% now, which is significantly lower than the level of the past two years. Furthermore, during the sharp rise from September 24 to October 9, stock ETF subscriptions became an important net inflow of capital, totaling about 287.2 billion yuan. Since October 10, ETFs have turned into a net outflow, and the net inflow portion of the previous period has already flowed out nearly half.