My fintech empire.

Chapter 1360 [New Hong Kong Stock Connect is launched, foreign investment is buying]

The SGX 50 Index has been strong since the opening, and overseas capital has entered the SGX market through the SGX-Hong Kong Stock Connect channel. Among many overseas investment institutions, two of the world's top ten sovereign funds have participated in the SGX market for strategic allocation after the first opening of the SGX-Hong Kong Stock Connect today.

The two major investment institutions are the Norwegian Pension Fund Global (GPFG) and the Norwegian Public Investment Fund (PIF).

As the world's largest sovereign fund, Norway's GPFG is well-known for its extensive investments in global stocks, bonds, real estate and commodities. As the driving force behind the country's economic transformation, PIF has invested heavily in technology, innovation and infrastructure. The many listed companies on the SGX market are highly compatible with this local tyrant's institution.

As the SGX market continues to strengthen, the Shanghai and Shenzhen stock markets next door have also been pulled up, and foreign capital has continued to flow in.

Although there are many junk stocks next door, there are still high-quality core assets, and since the second half of the year, foreign capital has continued to flow in to increase holdings of blue-chip stocks.

By around 11 a.m., data showed that today's net inflow of northbound funds had reached 331 billion, setting a new historical record.

Among them, the net inflow of New Stock Connect exceeded 226 billion, accounting for nearly %.

Judging from the data, foreign capital clearly prefers stocks on the SGX market, even though this market’s price-to-earnings ratio is already the highest among the three major A-share trading markets and has been denounced by countless experts as a bubble and dangerous.

But foreign capital inflows are obviously not affected by such arguments as they have their own investment logic.

Although the SGX market has officially opened up access to foreign capital, there are still some restrictions on the proportion of stocks held by foreign capital in SGX-listed companies, mainly including three points.

First, the shareholding ratio of a single foreign investor in a single listed company shall not exceed 5% of the total share capital of the listed company;

Second, the total shareholding ratio of all foreign investors in a single listed company shall not exceed 25% of the total share capital of the listed company;

Third, when the total proportion of shares held by foreign capital in companies listed on the SGX reaches 21% of the company's total share capital, it is the warning line; when it reaches 23%, it is the suspension line for buying; and when it reaches 25%, it is the forced reduction line.

These three restrictions mean that overseas capital investing in the SGX market can only play the role of financial investor and will not threaten the control of these companies.

Take the wealthy PIF investment fund as an example. Assuming that the institution is very optimistic about a company listed on the SGX and it is also very rich, it buys and buys, but it can only buy 5% at most. When it reaches this number, it can no longer buy any more and cannot pass the SGX trading system platform.

If the rich still want to buy, they can only buy another stock, and the upper limit is also only 5%.

However, in theory there is still a way to increase holdings by more than 5%, that is, the entire vest organization can buy another 5%. In theory, at least four or N vests can be used to buy the maximum limit of 25%.

This is not only true in theory, but also in practical operations. After all, it is difficult for the SGX market to penetrate the underlying structure of overseas capital institutions. However, Fang Hong doesn't care at all, and the SGX market doesn't care either. Even if the purchase is at the top, it is only 25% and it will not threaten the company's control.

In reality, it is basically impossible for a single foreign institution to hold 25% of the shares, even if it is a pseudonym, because it is open to global capital and others will also intervene. However, the SGX market does not care whether the foreign institution involved is a pseudonym or not. It only recognizes that your institution's shareholding ratio does not exceed 5%, and the total shareholding of all foreign institutions does not exceed 25%.

With the closing of the A-share market, the three major trading markets all ended in the red today. The SGX 50 Index directly reversed the previous five consecutive declines with a long positive line with large volume, and broke through the recent high, closing up +3.08% at 3962.82 points, returning to the 3900 point mark. The SGX market also had a large volume of 7202 billion today, an increase of nearly 2000 billion in trading volume from the previous trading day.

In terms of the Shanghai and Shenzhen stock markets, the Shanghai Composite Index also performed well today, rising +2.05% after the market to 2829.27 points, with a turnover of 1557 billion; the Shenzhen Component Index closed up +1.12% at 9281.48 points, with a turnover of 1927 billion. The total turnover of the two markets was 3848 billion, accounting for just over half of the SGX market.

The amount of funds released in the SGX market today is greater than that in any of the Shanghai and Shenzhen stock markets. It has to be said that this market is now the de facto face of the A-share market. A large number of junk stocks in the two neighboring markets have already evolved into "penny stocks" in advance, that is, there is no volume. For some stocks, even a random selling pressure of hundreds of thousands of funds can cause a drop of more than three percentage points.

Today was the first time that the Singapore Exchange opened up access to foreign capital. After the market closed, this became a topic of discussion among many people and everyone was paying close attention to it.

Data shows that today, northbound funds achieved a record net inflow of 627 billion yuan, which was reported extensively by many financial media because it had never been so exaggerated before. The net inflow in a single day was not uncommon at more than 150 billion yuan.

However, after a closer look, investors suddenly realized that the net inflow of the Shanghai and Shenzhen stock markets only accounted for 75 billion, which is a normal figure.

The remaining net inflow of 552 billion went entirely to the SGX market. While investors were surprised, they also felt it was reasonable, after all, the SGX market has been in a bull market since its opening.

If we insist on talking about a bear market, there have only been two technical bear markets. The first was the A-share circuit breaker event at the beginning of the market opening, which dragged down the two neighboring markets, causing the Xinzheng 50 Index to briefly fall to its current historical low of 788.87 points. The decline at that time was more than 20%, entering a technical bear market.

The second time was the WeChat illegal share reduction incident. At that time, the Xinzheng 50 Index also plummeted by more than 20%. However, these two so-called technical bear markets were shorter than the last. The WeChat illegal share reduction wave was quickly pulled up, creating a golden pit that is hard to come by.

Since the launch of the New Securities 50 Index, there have been two declines of more than 20%, and this has not happened again until today. Although there have been many declines and adjustments, they generally rose again after a drop of about 10 percentage points, and the largest adjustment was also in the range of 15 percentage points.

最近这一轮回调从4000多点跌到3640多点也只是回调了10个百分点左右，现在已经重回3900点之上，今天收盘已经实现了+8.84%的累计反弹幅度。

……

After the weekend, it’s Monday, August 7th.

The A-share market started as expected. The Xinzheng 50 Index opened slightly lower and then strengthened again after a few minutes of retreat. Foreign capital continued to buy, and was particularly fond of galaxy concept stocks. You must know that these stocks are currently trading very high.

But foreign capital is not afraid and continues to buy.

In the last hour of late afternoon trading, the SSE 50 Index regained the 4000-point mark. It took less than two months for it to reach this integer mark again since it fell below it on May 5.

At the close of the day, the SGX 50 Index rose again by +1.66% to 4028.69 points. Today's SGX market still maintained a trading volume of 7000 billion.

The scale of foreign capital inflows decreased compared to yesterday, but still reached a huge amount of 539 billion. In two days, the scale of net foreign capital inflows into the SGX market exceeded billion, attracting global attention.

Various financial media outlets have followed up with reports on the news that foreign capital is "crazily buying" stocks on the Singapore Exchange, and its popularity has far exceeded people's previous expectations.

……

(End of this chapter)