During the Qingming holiday, there was significant volatility in the global markets. On April 4th (U.S. time), the three major U.S. stock indices opened sharply higher and managed to maintain high levels of fluctuation in the morning, approaching their previous highs at one point. However, they experienced a steep drop in the afternoon. By the close, the S&P 500, Nasdaq, and Dow Jones had fallen by 1.23%, 1.40%, and 1.35%, respectively.

Subsequently, on April 5th (Beijing time), the Asia-Pacific markets also saw more declines than gains. Apart from slight increases in the stock markets of Indonesia, Pakistan, India, and Sri Lanka, the rest experienced varying degrees of decline. The Nikkei 225 in Japan led the Asia-Pacific decline with a drop of 1.96%, followed by the Ho Chi Minh Index in Vietnam, which fell by 1.04%, and the KOSPI in South Korea, which dropped by 0.97%. The Hang Seng Index in Hong Kong, China, fell by 1.46% during the session but gradually recovered, ending with a slight decrease of 0.01%. The CSI 300, influenced by the rebound in Hong Kong stocks, also recovered from a significant drop of 1.49% during the session to a minor decrease of 0.67%.

As the Qingming holiday comes to an end, how will the A-share market perform? Prior to the holiday, the A-share market showed a trend of narrow fluctuations, and some analysts believe that the main factors influencing the post-holiday A-share market direction will be the first-quarter macroeconomic data, the annual and first-quarter earnings reports of listed companies, and the ability to attract a sufficient amount of incremental capital.

It is worth noting that, for the month of March alone, both the number of public fund issuances and the data on private product filings showed a clear upward trend.

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Foreign capital inflows and lifting of fund purchase restrictions

Qian Qimin, Co-Director of the Research Department at Shenwan Hongyuan Securities, said in an interview with Yicai that before the Spring Festival, the A-share market was led by themes and driven by capital, with a strong short-term flavor. However, there is no particularly clear signal regarding the market direction after the Qingming Festival. Nevertheless, market confidence has indeed been somewhat eroded during the repeated consolidation.

Qian Qimin believes that after the holiday, investors need to pay attention to the first-quarter macroeconomic data, the annual and first-quarter earnings reports of listed companies.

"In the current situation, I think the short-term market will still be in a state of consolidation, and we will look for a new breakthrough direction after the festival. Of course, if the market is to break upward, it must have a handle, a stable and continuous hot spot to attract incremental capital. If the trading volume at this level cannot be increased, the chances of going up will be relatively limited," said Qian Qimin.

It is noteworthy that at the beginning of the second quarter, several actively managed equity funds have grouped together to resume large-amount purchases or purchases by individual investors, or to increase the large-amount purchase limit, some of which are managed by well-known fund managers.

Starting from April 1st, the Jiao Yin Qicheng Mixed Fund managed by Yang Jinjin will adjust the single-day purchase limit from the previous 1,000 yuan to 50,000 yuan, directly relaxing it to 50 times the original amount. The fund has had a strict purchase limit of 1,000 yuan since June 26th of last year, and such a strict restriction has lasted for more than nine months.Starting from April 1st, Huifeng Heng Mixed and Tianhong Hengxin Mixed have resumed large-scale subscriptions. From April 2nd, Jing Shun Great Wall Value Margin Flexible Allocation Mixed has resumed accepting subscriptions of more than two million yuan. This fund is managed by the renowned fund manager Bao Wu Ke, with a cumulative increase of over 12% in the range this year, and a nearly 16% annual return last year, ranking at the forefront of similar products. From May 5th, 2023, Jing Shun Great Wall Value Margin Flexible Allocation will initiate a daily purchase limit of two million yuan.

According to the latest announcements from fund companies, Zhongjia Xinyue Flexible Allocation Mixed and Minsheng Jinyin Quantitative China Flexible Allocation Mixed will resume the large-scale subscription business for funds on April 3rd.

Regarding the reason for lifting the purchase restrictions, the managers of the aforementioned funds have stated in their announcements that it is to meet the financial needs of investors.

Some analysts believe that the lifting of purchase restrictions on multiple funds indicates that, in the eyes of fund managers, the short-term market adjustment is nearing its end, representing institutional investors' recognition of the investment value of the current market position.

In addition, foreign capital is also flowing back. As an important channel for foreign investment in A-shares, the net inflow of Northbound capital into A-shares has far exceeded that of the whole of last year.

As of April 2nd, since the beginning of 2024, the net inflow of Northbound capital into A-shares has reached 66.605 billion yuan, while the net inflow of Northbound capital into A-shares for the whole of last year was 43.7 billion yuan.

By the end of March, Northbound capital had increased its holdings in 35 individual stocks for six consecutive months. Data shows that in March, the net inflow of Northbound capital was 21.985 billion yuan, with the textile and apparel industry and the banking industry seeing the largest increase in the number of shares held by Northbound capital.

Looking at individual stocks, 19 stocks including Lida Xin, Zhongfu Industry, and SMIC have seen their holdings doubled for six consecutive months by Northbound capital; at the same time, the public utilities sector has also seen increased holdings by Northbound capital for six consecutive months.

Chinese core assets have once again become a hot trading target for Northbound capital. In terms of Shanghai-Hong Kong Stock Connect, in March, 17 stocks including Zijin Mining, Yangtze Power, China Duty Free, and Ping An Insurance were net purchased by Northbound capital, with Zijin Mining's net purchase amount exceeding two billion yuan; in terms of Shenzhen-Hong Kong Stock Connect, 14 stocks including CATL, Wuliangye, Midea Group, and North Hua Chuang were net purchased by Northbound capital, with CATL's net purchase amount exceeding 5.8 billion yuan.

Fund issuance is picking up.Another positive signal in the market is the recovery of fund issuance.

Firstly, the number and share of public funds issued in March both increased significantly month-on-month. Data from the Public Fund Ranking Network shows that as of March 31st, a total of 292 new funds were issued in the first quarter, with a total issuance of 243.398 billion shares, averaging 834 million shares per issuance.

Looking at it month by month, since February, the A-share market has rebounded sharply, driving investors' enthusiasm for purchasing funds. In March, the issuance of public funds changed from the previous two months of sluggishness, and the confidence in public issuance was regained. Data from the Public Fund Ranking Network shows that in March, a total of 137 funds were issued, a month-on-month increase of 128.33%, accounting for 46.92% of the total issuance in the first quarter; the total issuance was 150.763 billion shares, a significant month-on-month increase of 317.66%, accounting for 61.94% of the total share issuance in the first quarter. The number of funds issued in a single month returned to over a hundred, and the share issuance returned to the ten billion mark.

The issuance of equity funds has continued to recover throughout the year. Data from the Public Fund Ranking Network shows that from January to March, the proportion of equity fund issuance shares has increased month by month, with the latest proportion in March reaching 16.37%, an increase of 8.14% from January.

For February alone, although the number of equity funds issued and the share issuance both hit a new low for the year, their share of the issuance proportion also increased compared to January, indicating that the low number and share issuance of equity funds in February were mainly due to the overall chill in the fund industry's issuance, which does not change the fact that investors' enthusiasm for investing in equity funds is continuing to rise.

Secondly, the filing of private securities products has warmed up. Data from the Private Fund Ranking Network shows that as of March 31st, a total of 1,625 private securities products were filed in the first quarter, with 529 private securities products filed in March, an increase of 19.41% compared to 443 in February, indicating a recovery in the filing of private securities products.

The filed private products are mainly focused on stocks. Data from the Private Fund Ranking Network shows that among the 1,625 private securities products filed in the first quarter, there were 1,058 stock strategy products, accounting for 65.11%. Multi-asset strategies and futures and derivatives strategies, which have a lower correlation with stock strategies, have also been popular, with 210 multi-asset strategy products and 179 futures and derivatives strategy products filed in the first quarter, accounting for 12.92% and 11.02% respectively. It is worth mentioning that the bond strategy, which has been leading in returns this year, is not favored. In the first quarter, 47 bond strategy products were filed, accounting for 2.89%, ranking last among the five major strategies.