Our reporter Cui Wenjing and Xia Xin reported in Beijing
On the evening of October 21, the Shanghai and Shenzhen Stock Exchanges successively announced the expansion of margin financing and securities lending (hereinafter referred to as “two financings”), and the underlying stocks increased by 200 and 400, respectively, to 1,000 and 1,200. The adjustment will be implemented from October 24, 2022. After the adjustment, the circulating market value of the two financing targets increased from 54 trillion yuan to 59 trillion yuan, and the proportion of the total market circulating market value increased from 84% to 92%.
A number of interviewees told the “China Business News” reporter that the expansion of the two financing and the reduction of the refinancing rate complement each other, both of which are the performance of financial deepening. In the short term, it will help attract incremental funds to enter the market and improve market liquidity; in the long run, it will help increase the depth of the capital market and reduce asset volatility in the face of external shocks.
The proportion of the market value of the two financing business has increased to 92%
On the evening of October 21, the Shanghai and Shenzhen Stock Exchanges announced the expansion of the A-share and two-finance business by 600. Among them, the Shanghai Stock Exchange announced to expand the number of underlying stocks for margin financing and securities lending on the main board from the existing 800 to 1,000; the Shenzhen Stock Exchange announced to expand the number of underlying stocks other than registered stocks from the existing 800 to 1,200. . The adjustment will be implemented from October 24, 2022.
Since the stocks on the Science and Technology Innovation Board and the ChiNext Board have all been included in the scope of the two financing targets, this adjustment is only for the Shanghai and Shenzhen main boards. According to the announcement of the exchange, after the adjustment, the circulating market value of the underlying stocks on the main board of the Shanghai Stock Exchange accounts for 95% of the circulating market value of A-shares on the main board of the Shanghai Stock Exchange (previously 84%), achieving full coverage of the constituent stocks of the Shanghai Stock Exchange among the constituent stocks of the CSI 300 Index. The coverage ratio of the constituent stocks of the CSI 500 Index and the constituent stocks of the CSI 1000 Index in the Shanghai Stock Exchange reached 98% and 86% respectively; the market value of the underlying stocks in Shenzhen accounted for nearly 90% of the market value of all A-share stocks in Shenzhen (previously 76%), to achieve full coverage of the GEM constituent stocks, the CSI 300 index mid-Shenzhen constituent stocks, and the CSI 500 index and CSI 1000 mid-Shenzhen constituent stocks to reach 97% respectively. , 83%.
It is reported that more than 70% of the new stocks in Shenzhen with a market value of less than 10 billion yuan in circulation, and nearly 60% of the stocks in key areas such as advanced manufacturing, digital economy, green and low-carbon, further broadening the coverage of small and medium-sized stocks , which enhances the industry and market representation of the two financing targets, and is conducive to promoting the allocation of market resources to key national support areas.
The Shanghai Stock Exchange stated that it will continue to adhere to the policy of “system establishment, non-intervention, and zero tolerance” and the regulatory philosophy of “four awes and one joint effort” to promote the steady development of the margin financing and securities lending business and guide securities companies to do a good job in risk management. At the same time, it is also hoped that the majority of investors will pay close attention to relevant business risks and establish a rational investment concept.
The Shenzhen Stock Exchange stated that under the unified leadership of the China Securities Regulatory Commission, it will practice the policy of “system building, non-intervention, and zero tolerance”, and will continue to optimize the basic system of margin financing and securities lending and improve risk prevention in accordance with the requirements of “four respects and one joint effort”. We will establish a control mechanism to guide securities companies to further improve their risk management level, jointly promote the long-term and healthy development of the two financing business, and effectively maintain the stable and orderly operation of the capital market. At the same time, it is hoped that investors will pay close attention to the leverage characteristics and business risks of margin financing and securities lending transactions, establish a rational investment concept, and prevent investment risks.
The A-share market officially introduced the two financing trading business in March 2010. At that time, there were 90 target stocks in the two financings. Since then, the main board has adjusted the target stocks seven times to 2,200. All stocks on the Growth Enterprise Market and the Science and Technology Innovation Board have now been included in the two financing targets. The Beijing Stock Exchange also released the “Beijing Stock Exchange Margin and Securities Lending Trading Rules” on September 2 this year. The scope of the financing target, and the newly listed stocks will be used as the target of margin financing and securities lending from the date of listing.
Market participants generally believe that the expansion of the two financing targets is conducive to meeting the diversified investment needs of investors, enhancing market activity and increasing capital market liquidity.
The above-mentioned viewpoints are also verified by the expansion data of the two companies in the past. Taking the sixth expansion of the main board in August 2019 as an example, the number of target stocks of the two financings increased from 950 to 1,600. After the expansion of the target stock, the proportion of financing purchases to the turnover of A shares increased from 7.25% within one month. It rose to 9.24%, the average daily turnover and turnover rate of newly added targets increased by 79% and 55% respectively, while the growth rate of the whole market was 46% and 39% respectively in the same period; the ratio of financing balance to circulating market value increased from 2.06 in one year. % rose to 2.35%.
Gao Chao, the chief analyst of the non-banking financial industry of Kaiyuan Securities, predicted that after the expansion of the Shanghai and Shenzhen main boards by 600, the circulating market value of the two financing targets will increase from 54 trillion yuan to 59 trillion yuan, accounting for an increase from 84% of the total market value to 59 trillion yuan. 92%, and it is expected to increase the net profit of the securities industry by 3.2%.
Why did the net profit of securities companies increase? Gaochao summarized it into two aspects: on the one hand, the expansion of the pool of two financing targets directly increases the potential development space of the two financing business, which is conducive to the growth of the net interest income of securities companies; The demand for trading strategies is conducive to the development of brokerage, quantitative trading, and over-the-counter derivatives, which in turn drives the growth of brokerage, quantitative proprietary and derivatives business income. He believes that Orient Fortune, Great Wall Securities, and Sinolink Securities, which currently account for the largest proportion of their own assets, may benefit more.