Financial Knowledge Check-in: Northbound Funds

Northbound Funds, also known as Northbound Funds and Foreign Capital Funds. It refers to the funds invested by foreign investors in China’s capital market.

Investment in foreign currencies such as US dollars, Hong Kong dollars, and euros

Mainly flows into mainland markets such as Shanghai Securities Market and Shenzhen Securities Market

Mainly invests in Chinese stocks and bonds, Warrants, etc.? Why is it called northbound?

In the A-share market, foreign funds are not allowed to directly participate, and foreign funds are controlled and cannot circulate freely.

my country's Hong Kong stock market is an international financial center. Many foreign funds can invest in Hong Kong stocks. my country has opened Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect in 2014 and 2016 respectively. This has affected the mutual flow of funds between the A-share market and the Hong Kong stock market. Because the mainland is to the north of Hong Kong, the term "capital going northward" has been formed. What is the signal of inflow and outflow?

In the Shanghai and Shenzhen stock markets, if the net inflow is positive, it means that the northbound funds on that day have flowed into the A-share market; if the net inflow is negative, it means that the northbound funds have flowed out of the A-share market on that day. market.

Northbound funds are a good signal for A-shares. After northbound funds flow into the A-share market in large quantities, the market performance is likely to improve. After all, funds are the main driving force for the rise of the stock market. If northbound funds flee one after another, A If the stock market trend is no longer strong, there will be a risk of falling, and investors need to pay attention.