CMS: Private equity stock fund positions stabilize, high ROE, high free cash flow leading style expected to dominate in the medium term
CMS Securities released a research report stating that the position of private equity stock funds has stabilized, and leading styles with high ROE and high free cash flow are expected to have a medium-term advantage. Last week, northbound funds saw net inflows into energy storage, green energy, medical equipment and services, while margin financing funds increased their positions in special estimates, liquor, and domestic semiconductor alternatives. The stock private equity position index is 78.03%, ending a four-week downward trend. Recently, private equity funds with a total of 5 billion yuan had the largest increase in positions. The issuance scale of stock-type private equity funds in May hit a new low for the year. In terms of monetary policy and interest rates, money market rates are rising, while yields on short and long-term government bonds are falling. In terms of fund supply and demand, the secondary market saw a slight net outflow in fund supply and demand, with northbound funds withdrawing 21.87 billion yuan and margin financing balance increasing
According to the Wise Finance APP, CMS Securities released a research report stating that last week, the secondary market saw a slight net outflow of trackable funds, an increase in trading activity of financing funds, and a rise in equity risk premium. In early June, private equity stock funds stabilized their positions, ending a four-week downward trend since the end of April. In terms of sector preferences, northbound funds saw net inflows in energy storage, green electricity, medical equipment and services, while financing funds increased their positions in special estimates, liquor, and domestic semiconductor alternatives. In terms of style, leading styles with high ROE and high free cash flow are expected to have a medium-term advantage.
Investor Monthly Tracking - Private Equity Stock Fund Positions Stabilize. As of June 7, 2024, the stock private equity position index was 78.03%, unchanged from the previous week (6/3-6/7), ending a four-week downward trend since late April. In terms of scale, recently, the five-billion private equity funds had the largest increase in positions. In the past week (6/11-6/14), the five-billion private equity funds had the largest increase in positions, with a 1.73% increase, while the one-billion private equity funds increased by 0.87%, and the two-billion and five-hundred-million private equity funds had smaller changes in positions. In May, a total of 768 stock-type private equity funds were issued, with a total size of 9.1 billion yuan, hitting a new low for the year 2024.
Monetary Policy and Interest Rates: Last week (6/11-6/14), the central bank net withdrew 20 billion yuan from the open market, with 80 billion yuan of reverse repurchase, 2370 billion yuan of MLF, and 700 billion yuan of national treasury cash deposits due in the coming week. Money market rates rose, short and long-term government bond yields fell, interbank CD issuance scale decreased, and issuance rates varied. As of June 14, R007 rose by 0.8bp, DR007 rose by 4.8bp, 1-year government bond yield fell by 1.0bp, 10-year government bond yield fell by 2.8bp, interbank CD issuance scale decreased by 27.35 billion yuan, 1M/3M interbank CD rates rose, and 6M interbank CD rates fell.
Funds Supply and Demand: There was a slight net outflow of trackable funds in the secondary market. Northbound funds saw a net outflow of 21.87 billion yuan; financing balance increased, with financing funds net buying 31.0 billion yuan; ETFs saw a net inflow of 134.2 billion yuan; newly established equity mutual funds saw a decrease in shares. Important shareholders shifted from net increase to net decrease, with a decrease in the announced planned reduction scale.
Market Sentiment: Last week, trading activity of financing funds increased, and equity risk premium rose. The style index and major industries that saw a relative increase in attention last week were only the ChiNext 50. The VIX index rose, and overseas market risk appetite decreased.
Market Preferences: In terms of industry preferences, electronics, agriculture, forestry, animal husbandry, fishery, and petroleum and petrochemicals received relatively high net inflows of various funds. In terms of sector preferences, northbound funds saw net inflows in energy storage, green electricity, medical equipment and services, while financing funds increased their positions in special estimates, liquor, and domestic semiconductor alternatives. Broad ETFs were all net purchases, with the most purchases in the ChiNext 50ETF; industry ETFs were mainly net purchases, with more purchases in healthcare ETFs and more redemptions in information technology ETFs. The highest net purchase was the Huaxia SSE STAR Market 50ETF The fund with the highest net redemptions is Guolian An CSI Semiconductor ETF.
Overseas Changes: In the US, the May CPI unexpectedly slowed down, leading to an increase in expectations of a Fed rate cut. The year-on-year growth rate of the US CPI in May was 3.3%, lower than the expected and previous value of 3.4%; the year-on-year growth rate of the core CPI in May was 3.4%, lower than the expected 3.5% and the previous value of 3.6%. Although the latest Fed dot plot adjusted the "three rate cuts within the year" to "one rate cut within the year", market expectations for a rate cut in September and two rate cuts within the year by the Fed are still increasing