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The 7th major expansion in the history of two-way financing is here. How will the review of the past affect the direction of China's financial market?
reviews the Chinese financial market, and the two-way financing market has officially expanded 7 times in the history of 7 major expansions:
- is the first time on December 5, 2011. The number of securities to be securities lending targets has officially expanded from 90 to 285, and 7 ETF funds have been introduced.
- The second time was on January 31, 2013. On that day, the two-way financing targets were expanded from the previous 278 to 500, and for the first time, 6 GEM 10 stocks were included in the two-way financing targets, namely Jifeng Agricultural Machinery , Robot, Huayi Brothers, Bishuiyuan , Rain Control Technology and Mengcao Drought Resistance.
- The third time was on September 16, 2013. The number of target stocks for margin financing and financing will be increased from the original 494 to 700. After that large-scale expansion, the stocks of the Shanghai and Shenzhen markets, which accounted for 87% and 59% of the circulating market value of , respectively.
- The fourth time was on September 22, 2014, adding 205 new margin trading target stocks. So far, there are 900 financing targets in Shanghai and Shenzhen (due to the intermittent period of large-scale adjustments, some companies may be transferred out financing targets due to mergers, ST and other reasons. In addition, the exchange will also adjust the financing targets every quarter, so the number of financing targets may also change at any time).
- The fifth time was on December 12, 2016. The Shanghai and Shenzhen stock exchanges expanded the number of target stocks from the previous 873 to 950. Among them, the number of target stocks on , Shanghai Stock Exchange, increased from 485 to 525; the number of target stocks on Shenzhen Stock Exchange, increased from 388 to 425.
- The 6th time was announced on August 9, 2019. On the 19th, the Shanghai and Shenzhen Stock Exchanges further expanded the scope of the two-financial trading mechanism, and greatly optimized the two-financial trading mechanism. Among them, the number of stocks with margin financing targets has been expanded from 950 to 1,600. 650 more.
- The 7th time is on October 24, 2022, the Shanghai and Shenzhen Stock Exchanges decided to further expand the scope of margin trading target stocks. The Shanghai Stock Exchange will expand the number of main board target stocks from the existing 800 to 1,000, and the Shenzhen Stock Exchange will expand the number of target stocks other than the Shenzhen Stock Exchange registration system from the existing 800 to 1,200. The adjustment will be implemented from October 24, 2022. Added 600.
The important underlying logic worth noting is: the margin trading is just an amplifier of market sentiment. After the expansion, the Shanghai Composite Index rose and fell, and the expansion did not change the market itself.
1, judging from the performance of the Shanghai Composite Index in three months after the expansion of the previous two financing targets:
recorded positive returns twice, in 2012 and 2014 respectively;
recorded negative returns three times, including 2 times in 2013 and 1 time in 2016.
Best performance was in September 2014, and the Shanghai Composite Index rose 34% within three months after the expansion.
's worst performance was in January 2013, and the Shanghai Composite Index fell 8.59% in the three months after the expansion.
Overall, the quantity is balanced, but the increase of is greater than the decline.
2. Judging from the trends of the Shanghai and Shenzhen 300 Index and CSI 500 Index after the expansion of the previous two-financial targets, whether it is weekly or monthly, the start of the two-financial trading and the subsequent five expansions, the average increase or decrease of the newly added stocks in can outperform the Shanghai and Shenzhen 300 Index most of the time.
Judging from the expansion of historical targets, newly selected target stocks tend to perform more actively in the short term.
After the expansion of the target stocks in 2019, the liquidity of the newly added 650 target stocks has increased significantly in the short term. Compared with the average level of the month before the expansion of the bid, the average daily turnover rate and average daily turnover of the newly added target stocks increased by 55% and 79% respectively, far exceeding the growth of 39% and 46% of the entire market. The news of the expansion of the two-way financing can be understood as the listed companies can borrow more money in A shares.
As one of the most active funds in in the A-share market, the two-way financing funds help improve the pricing efficiency and liquidity of the target stocks.
After this expansion, the proportion of the market value of margin financing and securities lending targets in total market value increased from about 70% to 80%, and the proportion of the market value of small and medium-sized board and GEM targets increased significantly.The expansion of the two-cap stock targets will increase the inflow of leverage funds for the SME Board and GEM to a certain extent, which will help increase the activity of the GEM. However, it depends on how many small and medium-cap stocks are included in the expansion of the pool of the two-cap stock targets and investors' judgment on the market.
In general, it is a good thing for China's A-share market:
expands the scope of the target stocks, based on the undivided stock funds, further bringing incremental funds to the market.
The expansion measures of the two-way target stocks will help attract incremental funds, enhance market confidence, and enhance market transaction activity. One more important dimension of
is to expand the scale and capacity of the financial market, and prepare for "building a nest and attracting phoenixes" in advance for more overseas Chinese companies and domestic real economy enterprises.
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3 rate cut by 40 basis points! How should we understand the pilot program of market-oriented financing business be launched?
The news of the expansion of the two financings can be understood as more money can be borrowed in A-shares.
transfer financing rate downgrade can be understood as more stocks that can be bought with borrowed money.
What is transfer financing?
Most people buy houses and take out loans, and some people also take out loans to trade stocks, which are divided into over-the-counter financing and on-the-counter financing. For example, looking for a bank loan to trade stocks is over-the-counter financing, but this is non-compliant. Borrowing money through financing and financing is compliant, and it is on-site financing.
Intra-funded financing means that customers borrow money from brokers, but where does the broker come from? Generally, it is borrowed from securities company . The securities company is the only financial institution in China engaged in transfer and financing business . The process of a broker borrowing money from a securities company is to transfer financing.
On October 20, China Securities Finance Co., Ltd. (hereinafter referred to as "Securities and Financial Company") issued two announcements, one is to launch a pilot program of market-oriented financing business, and the other is to lower the financing rate of 40BP.
Just like central bank can replenish commercial banks' funds through re-lending and re-discounting, securities companies can lend their own funds to securities companies and then provide them with the securities companies to customers for them to buy listed securities. This is the transfer financing business. From the perspective of the operation process of transfer financing, the cost reduction caused by the reduction in transfer financing fee rate can be transferred to investors, which can indeed be regarded as a substantial "benefit", and the market also interprets it as a targeted interest rate cut for A-shares.
According to statistics, the market has provided a total of about 1.8 trillion yuan in the ten years since its launch in 2012 to 2022. Recently, the financing balance of for the market has remained at around 60 billion yuan, accounting for about 4% of the financing balance of the two cities, which is not high.
has not been very strong in history to adjust the transfer and financing rate of 40BP.
However, it is worth noting that the adjusted 182-day transfer and financing fee rate is 2.1%, which is lower than the comprehensive liability cost of listed securities companies in the first half of 2022 (average 3.3% / maximum 5.2%). It can be said that for securities companies that have continued to increase operating pressure in the past year, it is a long drought, especially for securities companies with tight liquidity or high capital costs, it is more beneficial. In the past, every time the transfer and financing fee rate was reduced, it did have a significant driving effect on the securities sector and the entire A-share market. The reduction in the financing rate of
means that the money in the stock market is cheaper, which has a positive benefit to the index.
On August 15, 2014, CSI Finance lowered the transfer and financing rate of 80BP, and the 182-day transfer and financing rate dropped from 6.6% to 5.8%. A few months later, the Shanghai Composite Index continued to soar, with a cumulative increase of more than 130%.
On March 18, 2016, CSI Finance lowered the transfer and financing fee rate for each term by more than 30%, and the A-share market ushered in a bull market that lasted more than one and a half years.
August 7, 2019, CSI Finance cut its overall transfer and financing fee rate of 80BP. A-shares experienced a short-term rebound, and A-shares launched a bull market in 2019. After the reduction of the financing fee rate of
, A-shares will usher in a wave of market conditions. So will this time continue this rule?
From the logic of financial management, there is a high probability that China's A-shares will have a good short-term performance under this positive effect.
The stock market is not complicated, it just artificially makes the stock market too complicated. In fact, there are two conditions for the upward trend of the financial market, namely the low interest rate monetary policy environment and the trend of monetary expansion. The reduction in the interest rate of
transfer financing means that the leverage cost of the stock market will be reduced, which will bring two inevitable trend impacts: the reduction in the interest rate of
1 and transfer financing fees means that the interest rate of many loan products will drop in the overall environment. The most typical is an insurance policy loan, with the current interest rate being 5%, which is difficult to maintain over time.
2 and All stable wealth management products have a yield of . For example, Yu'ebao , bank wealth management, and deposit interest rates. Everyone can understand this. Currently, Yu'ebao's yield has dropped to 1.38%.
Have you seen any trends?
Interest rates in the entire economic environment are falling. Isn’t this an obvious attitude that forces funds to enter entities and markets?
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Combined with the previous analysis of the subsequent economic recovery of China,
deeply analyzes the trend impact of the two positive signals in this financial market. It may be possible that
looks at economic trends and analyzes trend risks. It is necessary to have a certain macro-cognition and economic logic foundation.
In 2022, if China's domestic economy wants to achieve a comprehensive recovery and maintain its development trend in the future, it will basically achieve and choose from three dimensions. I have mentioned this several times in the recent economic analysis article. Here I will review it:
or is the domestic asset field (mainly real estate). Through the market upward trend, it efficiently leverages the base currency to generate credit expansion , which corresponds to the rise in housing prices and the market recovery;
or is the domestic consumption field. In addition to the daily basic consumption of people's livelihood, prices have risen, which is of course a controllable benign inflation, which drives credit expansion through consumption;
or is the financial market trend, and through the expectations and confidence of increasing asset income, the direct increase of the real economy and commercial activities can be achieved.
Please do not argue or complain with extreme thinking. This is the three inevitable options for a country and an economy that can achieve normal, comprehensive and sustainable economic growth. It is not very meaningful to talk about too many fake and large-scale macro concepts.
What technological innovation, industrial upgrading, currency war , and how much is it directly related to ordinary people and the basic group with a huge base?
Of course, it is worth mentioning that there is another saying, that is, why does China not directly send money to the people?
One reason is enough: if a country's currency cannot have the ability to expand its settlement outward and form a second controllable amount of funds except for the domestic economic environment, then the excessive currency issuance, government debt consumption, and the corresponding results will always be vicious inflation, currency collapse, and overdraft in the future.
The United States can issue money because the US dollar can transfer government debt through global bond issuance and global settlement.
Back to China, combined with China's economic environment and policy attitude, from the current main theme of "housing for living, not for speculation" and the reality of consumption tightening under the impact of the epidemic, and combining the actions in the field of financial control, what do you think is the most likely path and direction?
has a very clear main line, that is, residents' wealth is concentrated in the financial market, which is a very obvious opportunity for the moment. If you look at it from a long-term perspective, now you are planning A-shares and look at your account after 10 years, it will definitely be high-yield, but the previous question is to have long-term thinking, be able to withstand fluctuations, and be able to endure loneliness.
Of course, this is just a rational and linear analysis based on the current policy environment and economic situation. In the future, China will achieve comprehensive rise, financial development, and market development, and attract global capital and savings to continue entering, which is a very critical criterion.
will have an inevitable process of survival of the fittest and expelling bad coins, reshuffles, twists and turns, and are inevitable.
However, the rise of finance is a must for China. It will make breakthroughs in technology, technology and industry within the country. Externally, the financial market absorbs global capital for its own use, improves people's livelihood and drives the economy.
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at the end:
Some personal thoughts and opinions sharing
What should be said should be said: the stock market has risks, you need to be cautious when entering the market. All investment behaviors have the possibility of risks and losses. No matter how good the trend is, there will never be a shortage of losers washed away by the wave of the times.
Of course, this article does not instigate everyone to invest and fund allocation in the slightest, but is just a rational discussion and analysis and thinking based on reality and trends.
There is no doubt that after China's rapid development over the past few decades, it has also come to a crucial turning point and breakthrough point at this critical time node in 2022.
A great country is concerned about the rules and regulations to clean up the eagerness and impetuousness left over from the rapid growth stage, establish a standardized and complete system and rule environment, step by step, and move forward steadily and far. This is the inevitable direction.
At the end of the article, I would like to talk about some personal thoughts and opinions, which is not necessarily correct. Just use it as a throw-in to attract jade for readers and friends to discuss and refer to:
1. Financial market, look at emotions in the short term, plan in the medium term, and national destiny in the long term. Don’t be confused by short-term market sentiment and positive dynamics. This is very important. Speculation in the financial market and the mentality of quick success and instant benefits is impossible to achieve long-term profit.
If you resonate with this view, please like it.
2. The understanding of domestic assets in China needs to keep pace with the times, especially real estate.
has written several analysis articles in a row recently, and it will not be expanded more. It belongs to the era of China's real estate price spread arbitrage and speculation to make money. There is no suspense coming to an end.
3. China's financial market still requires process and time to truly mature and stable return on value, but this does not prevent everyone from understanding, paying attention, and trying to participate in advance.
As long as you know that if China wants to do it in the future, the financial market must not fail.
Awareness in advance, explore value, be familiar with the market, and there is no harm. But the group and mentality who are eager for quick success and instant benefits, are impetuous and shallow, just want to make a fortune and make quick money. Sorry, when I didn't say it, the market will use reality to give enough hammer and education.
4. The country attaches importance to the growth of the financial field and plays the role of the financial market in driving the economy. This is a great benefit. Regardless of whether it participates in the financial market, it actually releases its attitude towards the field of people's livelihood consumption.
That means don’t try to speculate on prices to pursue arbitrage. This signal can be said to be very clear.
For the real economy and listed companies, it is a clear main line to obtain funds from the financial market to pursue profits, improve the level of production services, make concessions to the market, benefit the people, and then return to the market.
Of course, this is a difficult and correct path, with sustainability and future imagination, and how many real economy entities and individuals can resist temptation and see the direction clearly to take this path?
This is a good question and a good direction. Whether it is the harvest of the financial market or the transfer cost of the real economy, it is actually the norm. For the country, such a normal is not the direction.
probably said so much, respect reality and have a basis.
or above is an in-depth interpretation and analysis of the positive trends in China's financial field in October 2022, and share with all readers.
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According to the latest regulations of relevant national departments, the content and opinions of this article are for reference only and do not constitute any clear suggestions on property purchase, investment, etc., and the risks of entering the market are at their own risk.)
or above text, from @Panda Beibei Little Cute
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