The Impact of Northbound Cash Flows on the Investor Sentiment of Mainland Chinese A-share Investors

Abstract

Nowadays, Shanghai Hong Kong Stock Connect and Shenzhen Hong Kong Stock Connect have run smoothly for many years. Overseas capital is increasingly widely used in Chinese mainland stock market. Some ordinary investors will choose northbound cash flow (overseas capital) as the wind vane to guide their investment behavior. This study will analyze whether northbound cash flow impacts investor sentiment in China's stock market combined with market data in recent years. Moreover, this paper will classify the data from different kinds of markets and different market sentiment conditions. Analyze the impact of changes in market investor sentiment by northbound cash flow under different circumstances.