He divided the trading team into two groups. One group is responsible for buying out Hong Kong technology stocks and outstanding red chips during the day, and the other group is responsible for pushing up the share price of China Stock Exchange listed in the United States at night.
"As the linkage effect between Hong Kong's technology stocks and stocks in the new economic sector has been significantly enhanced recently, this move can benefit the two capital markets." Zhang Gang told 2 1 Century Business Herald. Through this cross-border arbitrage strategy, the returns of the two overseas investment funds he manages have now exceeded 25%.
Under the current market conditions, the number of domestic private equity investment institutions adopting similar strategies has increased rapidly.
A person in charge of a quantitative investment private equity institution in China told reporters that they are currently investing in spread arbitrage around Ali, JD.COM and other stocks. These stocks are listed in US and Hong Kong stocks at the same time. Once the price difference between the two places is large, it will form a band operation opportunity of selling high and buying low.
"In addition, we also bought up Hong Kong stocks and China Stock Exchange in the Internet social entertainment sector, because as long as Hong Kong stocks rise, China Stock Exchange will also rise." The person in charge of the private equity institution pointed out. Behind this is the influx of southbound funds into Hong Kong stocks, pushing up the stock prices of new economic sectors such as the Internet, and investment institutions on the other side of the Pacific are also optimistic about the Chinese stocks in the same sector.
A hedge fund manager of Wall Street's stock bull market told reporters that their bullish sentiment towards stocks in the new economic sector has warmed up due to the continuous influx of southbound funds into Hong Kong stocks. Compared with the hot American technology stocks that have been facing the controversy of high valuation bubble, these Chinese stocks have benefited from the first rebound of China's economy and the continuous pursuit of funds, and they have more rising potential.
"We have planned to free up 5% of the funds to buy stocks in the new economic sector, and then sell on rallies when there is an inflection point in the inflow of funds to the south." The above fund manager said. However, some Wall Street investment institutions have begun to take profits ahead of schedule. 2 1 afternoon, the Hang Seng Index was once adjusted back to 100.
In the future, the cross-border arbitrage trading strategy and profit-taking will launch a fierce long-short game.
Cross-border arbitrage trading has revived. "As early as last year, we tried cross-border arbitrage trading, but it had little effect." Zhang Gang said. For most of last year, Hong Kong stocks followed the decline rather than the rise, so their strategy of "boosting" Hong Kong technology stocks by buying up China stocks often failed.
Since the beginning of this year, more than 654.38+08 billion yuan of southbound funds have flooded into Hong Kong stocks, and the opportunity for cross-border arbitrage has come again.
The data shows that in addition to the influx of outstanding red chips such as China Mobile, China Unicom and SMIC, southbound funds have also increased positions in new economic sectors such as Tencent and JD.COM.
"We quickly decided to set up two trading teams to buy out Hong Kong stocks and China Stock Exchange in turn day and night." Zhang Gang revealed. At present, the feedback from the two trading teams shows that the linkage effect between China Stock Exchange and Hong Kong stocks has been significantly enhanced, and the profit from investment has become simple. As long as the share price of China Stock Exchange Technology Company rises in the evening, it will catch up with Hong Kong stock technology stocks the next morning, and it will get a lot of returns.
Zhang Gang also found that the share prices of individual companies listed in both Hong Kong and US stocks also rose. For example, in a new economic sector, the US stock index rose by 5% during trading hours. After the Hong Kong stock market opened the next day, its share price soared by more than 6%.
Behind this, the stock price linkage effect drives a large number of southbound funds to pursue the "undervalued" Hong Kong stocks of the same listed company, and the soaring stock price of Hong Kong stocks in turn pushes up the stock price of China Stock Exchange, thus causing a circular effect.
"Before that, we were worried that after last year's surge, the stock valuations in many new economic sectors were already very high. Now it seems that we have completely underestimated the next level of valuation effects brought about by the influx of southern funds. " Zhang Gang said.
The person in charge of the above-mentioned domestic quantitative investment private equity institutions revealed that due to the continuous influx of southbound funds into Hong Kong stocks, many domestic private equity institutions have adjusted the investment model parameters of China Stock Exchange and Hong Kong stocks, including significantly increasing the factor weight of the influx of southbound funds. In his view, as long as the influx of southbound funds continues to push up Hong Kong stocks, it will drive China Stock Exchange to follow suit, so cross-border buying arbitrage transactions will yield more generous returns.
A domestic Internet broker admitted that in the case of hot cross-border arbitrage transactions, the funds of domestic private equity institutions that have recently flowed to China Stock Exchange through Internet brokers have increased substantially.
"Some domestic private equity institutions directly sell bonds with a value of10 million dollars or more, and add funds for Chinese stocks in the fields of new energy vehicles, Internet brokers, new economic sectors and Internet social entertainment. The current market situation shows that as long as the net inflow of southbound funds continues to run at a high level, the upward trend of stocks in these fields is unlikely to turn. " The above-mentioned Internet brokers pointed out.
However, these domestic private equity institutions will not blindly embrace cross-border acquisition arbitrage transactions. On June 65438+1October 2 1 day, the net inflow of southbound funds was only1500 million Hong Kong dollars, which was lower than the average daily inflow of 20 billion Hong Kong dollars in the previous three trading days. The amount of China stocks bought by these private equity institutions has also dropped significantly compared with the previous days, and some institutions even started to sell some China stocks to make profits.
Wall Street hedge funds intend to over-allocate China shares. It is worth noting that the continuous influx of southbound funds into Hong Kong stocks has made many Wall Street investment institutions "sit up and take notice" of China stocks.
"Previously, due to the tightening of Sino-US relations and other factors, we always allocated low shares in the new economic sector. However, since last week, the Hong Kong stock trading team has strongly recommended that the headquarters increase the position of the new economic sector almost every day. " The aforementioned Wall Street stock bull market hedge fund trader told reporters. Because the Hong Kong stock trading team believes that while the influx of southbound funds pushes up Hong Kong stocks, it will inevitably drive the stock valuations of new energy vehicles, Internet social entertainment and other sectors to continue to rise. The earlier you buy, the higher the income.
The above hedge fund traders said that the investment logic of the Hong Kong stock trading team is very similar to that of cross-border buy arbitrage trading. However, the fund headquarters is hesitant about this. It was not until this week that they decided to increase their positions after seeing the net inflow of southbound funds exceeding HK$ 20 billion for three consecutive trading days, resulting in the actual return on this investment being 8-9 percentage points lower than that of the operation a week ago.
2 1 Century Business Herald The reporter learned from many sources that a number of Wall Street hedge funds, which were previously equipped with Chinese stocks as standard, are discussing whether to adopt an over-allocation strategy. They note that high-tech China stocks have more potential to rise than popular American technology stocks. On the one hand, they are supported by the fundamentals of China's steady economic recovery; On the other hand, funds from the south continued to flow into Hong Kong stocks, and the valuation went up a storey still higher.
"Even many hedge funds have closely linked the rise of the RMB exchange rate with the influx of China capital into China stocks and Hong Kong stocks." Jeffrey Halley, strategist at hedge fund OANDA, pointed out.
Specifically, these hedge funds believe that the exchange rate of RMB against the US dollar has risen by more than 9% in the past six months (once above 6.45), which is pushing a large number of China capitals to accelerate the pace of global asset allocation while the cost of purchasing foreign exchange has dropped sharply. Hong Kong stocks with low valuation and high growth in high-tech and new economic sectors are precisely the investment focus of these new admission funds, so there is a closer linkage between Hong Kong stocks and US stocks.
"At present, most people in our asset allocation department suggest increasing the investment ratio of China Stock Exchange from the original 4% to around 7%, that is, increasing the position of China Stock Exchange by more than 20 million US dollars." A Wall Street event-driven hedge fund manager told reporters. However, some members of the Fund Investment Committee are relatively cautious about this. They are worried that the funds in the south will fall back, or that the Chinese stocks and Hong Kong stocks will take profits, and they are worried that they will become "takers".