How far is the big financial roller coaster from the year-end Pro cyclical tuyere?

category:Finance
 How far is the big financial roller coaster from the year-end Pro cyclical tuyere?


This Mondays big financial transactions were so large that it was suspected of falling into the bag after being pulled up. It seems that the big finance broke out recently, but in fact, there were funds arranged ahead of time. There are also views that the current financial stocks have the conditions to rise, in the economic recovery, performance margin significantly improved, catalyst resonance, valuation repair is imminent. From the historical point of view, financial stocks represented by bank stocks are also easy to come out of a wave at the end of the year and even lead to spring agitation. As a result, with the valuation of multiple sub sectors in the plate falling to historical lows, the potential of future plate valuation repair may bring more investment opportunities, which will also be conducive to the further development of this round of market.

Wu Zhaoyin, director of macro strategy of AVIC trust, told CFA that in recent trading days, the big financial sector has risen strongly. The main logic is that the rapid economic recovery has driven up interest rates, the banks deposit and loan spreads have picked up, and the banks profit expectations have risen. At the same time, the bad debts of banks have decreased due to the economic recovery, which has contributed to the improvement of the fundamentals of bank stocks. Recently, there have been many risks in the credit bond market, but the dividend yield of big finance is higher, which is not much lower than the nominal interest rate of some credit bonds, and the liquidity of financial stocks is obviously better than that of corporate bonds. As a result, some funds originally invested in corporate bonds have turned to financial stocks with higher dividend yield, which also promotes the rise of the financial sector.

Wu Zhaoyin further elaborated that it is obvious that the incremental funds in the current market are relatively limited. If the stock funds are used to chase financial stocks, then the consumption and technology stocks with good trend will weaken, so it is difficult for large financial sectors to rise sharply in a short period of time. Finally, funds are constantly switching between consumption, technology and financial stocks, which makes it more difficult to adjust positions and exchange stocks, but the overall upward trend of the market has not changed.

The transaction volume of big finance exceeded 160 billion, nearly 1.1 times that of last Friday

The turnover of the big financial sector was more than twice that of last Friday. As of the press release, the transaction volume of the large financial sector, including banks, insurance companies and securities companies, was 165.103 billion yuan, more than 108.15% of the turnover on Friday.

Among the 46 securities companies, 25 stocks traded more than 1 billion yuan. CITIC Securities and CICC ranked first and second, with transactions of 9.264 billion yuan and 6.562 billion yuan respectively. In addition, Dongfang fortune, a joint stock broker, traded 19.8 billion yuan; 17 bank stocks, with a turnover of more than 1 billion yuan, were ICBC, Industrial Bank of China and China Merchants Bank, with transactions of 6.851 billion yuan, 6.192 billion yuan and 5.292 billion yuan respectively. The transaction volume of China Ping An insurance stock was 14.316 billion yuan, with the transaction volume of 3.5 billion yuan and 2.298 billion yuan respectively of China Pacific Insurance and Xinhua insurance.

In terms of turnover rate, CICC (37.78%), Guolian securities (33.88%), Zhongtai securities (28.53%), Xiangcai shares (18.73%), Bank of China Securities (15.84%) and Guosheng financial holding (10.28%), respectively. The turnover rate of Dongfang fortune was 9.88%.

The Shanghai and Shenzhen stock indexes have broken through the 3400 integer mark in late trading. By the end of the day, the Shanghai index fell 0.49% to 3391.76 and the index to 2631.89, up 0.49%; the Shenzhen composite index fell 0.15% to 13670.11.

The central banks release of liquidity at the end of the month became the fuse of the big financial outbreak. On November 30, the central bank launched the 200 billion yuan medium-term loan facility (MLF) operation and the 150 billion yuan reverse repurchase operation, with the bid winning rate of 2.95% and 2.20% respectively. In addition, the peoples Bank of China will carry out medium-term loan facility (MLF) operation on December 15 (including one-time renewal of two MLF maturities on December 7 and 16). The specific operation amount will be determined according to market demand and other conditions.

CICC: optimistic about the growth of high-quality securities companies in the head, which will usher in a period of comprehensive improvement and development

CICC believes that the improvement of short-term trading activity, business expansion and mode upgrading of medium and long-term securities companies, and structural increase in the proportion of long-term direct financing are still the main logic of this round of securities investment.

In the short term, with the support of internal and external market environment and story liquidity, the securities business plate still maintains a high momentum, while the main body transactions such as mergers and acquisitions within the board are active; in the medium term (2021), policies continue to be favorable, high-quality new economy companies are listed, and long-term funds enter the market to help optimize the business environment of the industry and maintain high profit growth; in the long run, it is more optimistic The growth of top quality securities companies, under the background of vigorously developing direct financing, higher level of financial opening, industry supply side reform and financial technology empowerment, tou securities companies are ushering in an important development period of comprehensive improvement of business environment, industry pattern and business model.

In addition, according to the previous statistics of CFA reporters, in the fourth quarter, a total of 9 securities companies continued to be bullish by the institutions, giving a increase rating, namely Huatai Securities, CITIC Securities, Guotai Junan, Guangfa Securities, China Merchants Securities, Zhongtai securities, Guojin securities, Guoyuan securities, Haitong Securities.

CSCI: focus on big banks supplementary price and valuation repair market in December

The Bank of China Research Institute released the 2021 economic and financial outlook report today. It is estimated that the growth rate of Chinas banking assets and liabilities will be 10% - 11% over the same period of last year, and the growth rate will be slower than that in 2020. The report also predicts that the net profit of Chinas banking industry will hit the bottom and rebound next year, and the year-on-year growth rate is expected to change from negative to positive, achieving a growth rate of 2% - 3%.

In the third quarter monetary policy implementation report, the central bank believed that the economic improvement was better than expected, and loan interest rates began to rise month on month in September, according to the Research Report of China Securities Yang Rong. In the upward cycle of loan interest rate, the banks interest margin and profitability will be improved. The banking sector is expected to continue to rise in December.

Which type of banks will benefit more in the period of significant economic improvement and month on month recovery of loan interest rates?

According to the Research Report of Yang Rongs team, it is mainly based on three reasons: first, the rotation within the board; the valuation of high-quality bank shares is reasonable, and the estimated premium rate is difficult to be significantly increased; in December, the performance elasticity of large industries with more significant undervalued and fundamental marginal improvement is greater, so the valuation space is larger; as the valuation of high-quality bank shares enters the platform period, the valuation premium rate is difficult to be significantly increased However, the valuation of big banks is still at a low level, and there is more room for upward valuation. From the perspective of plate rotation, the upward momentum and space of big banks are larger in December.

Yang Rongs team believes that the opportunities for the banking sector mainly come from three aspects: first, the economic growth rate will rise month on month in the future; the banks will benefit from the cyclical recovery; second, the growth rate of the industrys net profit will rise quarter by quarter; and the third is the undervalued value. Banks must complete the valuation switch by the end of the year, with a space of at least 10%.

Anxin Securities: the insurance market will continue at the end of the year, and the bad effects of insurance enterprises have been gradually cleared out

According to Anxin securities, the improvement of both the liability side and the investment side has promoted the continuous improvement of insurance valuation. The insurance market will continue at the end of the year. The negative effects of insurance enterprises have been gradually cleared, and the reform of individual insurance team has been stabilized. A good start at present, the pre-sale situation is good, and the debt side continues to improve. The long-term interest rate has risen steadily, alleviating the interest rate spread loss concern, which is better than the insurance sector valuation to further repair.

West Africa bank believes that China Ping An and China Pacific Insurance will not rise in 2020, compared with the pure life insurance subject Xinhua and Guoshou, the supplementary effect is obvious. In 2021, the new premium and NBV double-digit growth are more certain, while the base of Xinhua and Guoshou is higher. The long-term interest rate is expected to rise in the first quarter, with a range of 3.3-3.5. At least before the lunar new year, the performance of interest rate upward + good start is determined, and the growth space of 20%. Pingan and Taibao have low valuations. Taibao GDR gradually clears up the pressure on the stock price and ushers in valuation repair.

Source of this article: Yang Bin, editor in charge of CFA_ NF4368