A thrilling scene! 230 billion big blue chips fell sharply at the beginning of the market and were reaped by arbitrage?

category:Finance
 A thrilling scene! 230 billion big blue chips fell sharply at the beginning of the market and were reaped by arbitrage?


However, after that, the decline of China National Insurance Company narrowed, and the decline of the whole insurance sector also narrowed. By the end of the 22nd, Taibao shares closed at 33.35 yuan / share, down 2.43%. The insurance index fell 1.56%.

Todays opening stock price slump may be related to the GDR conversion. Taibao GDR began to turn the day before yesterday, and can sell a shares today. An insurance industry analyst.

As the second order of Shanghai Luntong stock exchange, GDR (Global depository receipt) issued by China Pacific Insurance Corporation (CPB) started conditional trading on June 17, and was officially listed on the London Stock Exchange on June 22. The issue price of each GDR is US $17.60, and each GDR represents five A shares of the company.

On October 20, when GDR was convertible, Taibao A shares fell 0.77% to 33.55 yuan / share. However, on the 21st, Taibaos shares rose 1.88% to 34.18 yuan / share. On the same day, the closing price of Taibao GDR in the lungx was US $4.15 per share, corresponding to US $4.83 per share of new shares (about RMB 32.26). The premium rate of Taibao A shares over GDR is about 5.95%.

According to the above analysts, although the arbitrage space of Taibao GDR is not particularly high, some investors bought it for the sake of arbitrage now, so there is a bit of space. According to the previous experience of Huatai GDR, the main impact should be on the 22nd. It is estimated that arbitrage funds will come out in the future, and the continuous impact is expected to last for a period of time.

On October 21 of last year, the first A-share of Huatai Securities of Shanghai Luntong closed at 5.7%, and the premium gradually narrowed to less than 1%.

In order to prevent arbitrage caused by the conversion of GDR, Taibao has taken into consideration when issuing GDR. For example, the final price of GDR issue is 17.60 US dollars per share, which is about 10% discount compared with the A shares at that time. Considering the arbitrage cost of about 5% - 10%, the arbitrage space is limited; for example, ruizai, the cornerstone investor, has set a three-year lock-in period.

According to Shen wanhongyuans analysis, the current P / EV of Taibao A shares and H shares are 0.71x and 0.46x respectively, which are in the valuation quantile of 8.4% and 5.6% since 2011, and the corresponding dynamic dividend yield is 3.9% and 6.1%. Xinxiang, a good product with good feedback, has a limited scale of 10 billion yuan. As an undervalued high dividend insurance leader, we maintain the buy rating. We suggest that we should pay close attention to the investment opportunities of Hong Kong stocks in the fourth quarter and the investment opportunities of a shares after GDR conversion.

Taibaos share price slump is also related to the recent overall adjustment of the capital market. On the 22nd, the overall performance of a shares was weak, with the Shanghai composite index down 0.38% and the Shenzhen composite index down 0.53%. China Life Insurance and China Pacific Insurance fell more than 2%.

Since this year, the overall performance of insurance stocks is average. From the beginning of this year to October 22, the Shanghai Composite Index rose by 8.6%, the Shenzhen Composite Index by 28.42%, and the insurance index by only 1.58%. However, since October, insurance stocks have seen a wave of rise, during which the Shanghai Composite Index rose 2.94%, the Shenzhen Composite Index rose 3.79%, and the insurance stock index rose 8.04%, significantly outperforming the market.

In the first three quarters of this year, the premium income of five A-share insurance companies increased by 5.8% year-on-year, which was roughly the same as that of the previous August, indicating that the insurance market is slowly recovering. The year-on-year growth rate of China Ping An insurance and China Taiping Insurance Co., Ltd. continued to improve. At the same time, listed insurance companies have begun to make a good start in advance.

According to the analysis of China Merchants Securities, from the perspective of life insurance, it is estimated that the trend of premiums of Companies in the follow-up period of 2020 will not be improved, mainly because the current companies have actively prepared for the start of the war, and strategically abandoned the premium target of 2020. In terms of property insurance, the comprehensive reform of automobile insurance has been officially implemented for a month, and there is no sharp decline in average vehicle premium in the short term. The follow-up market feedback remains to be observed. Under the background of more rational competition, the competitive advantages of leading listed insurance companies are expected to further highlight. The analysis team believes that the insurance industry is expected to achieve a better than expected growth in 2021 and start the recovery cycle at the debt side of the industry. From the asset side, the interest rate of the 10-year Treasury bond is expected to continue to stay above 3.2%, which is expected to further increase, effectively driving the valuation of the insurance board up. Tianfeng Securities said that on the asset side, long-term interest rates stabilized and rebounded, and the long-term investment yield of insurance companies was expected to increase, which helped to repair the valuation of insurance stocks and switch over valuations; on the liability side, the expectation of a good start and high growth is expected to gradually materialize, catalyzing the insurance stock market. Source of this article: Zhong Qiming, editor in charge of securities companies in China_ NF5619

According to the analysis of China Merchants Securities, from the perspective of life insurance, it is estimated that the trend of premiums of Companies in the follow-up period of 2020 will not be improved, mainly because the current companies have actively prepared for the start of the war, and strategically abandoned the premium target of 2020. In terms of property insurance, the comprehensive reform of automobile insurance has been officially implemented for a month, and there is no sharp decline in average vehicle premium in the short term. The follow-up market feedback remains to be observed. Under the background of more rational competition, the competitive advantages of leading listed insurance companies are expected to further highlight.

The analysis team believes that the insurance industry is expected to achieve a better than expected growth in 2021 and start the recovery cycle at the debt side of the industry. From the asset side, the interest rate of the 10-year Treasury bond is expected to continue to stay above 3.2%, which is expected to further increase, effectively driving the valuation of the insurance board up.

Tianfeng Securities said that on the asset side, long-term interest rates stabilized and rebounded, and the long-term investment yield of insurance companies was expected to increase, which helped to repair the valuation of insurance stocks and switch over valuations; on the liability side, the expectation of a good start and high growth is expected to gradually materialize, catalyzing the insurance stock market.