The Zhitong Finance App learned that China Post Securities released a research report saying that the 13 listed brokerage firms that have now disclosed their semi-annual reports have total revenue of 154.9 billion yuan and net profit of 69.5 billion yuan. The overall performance has achieved a high increase, and the net profit of 12 companies has increased positively over the same period last year. The leading effect of the industry continues to strengthen, and the pattern of strength of the strong is further consolidated. The core support for performance comes from the historical daily turnover of 317.5 trillion yuan of A-shares in the first half of the year, which directly drives the full expansion of brokerage and proprietary business. Currently, market trading is popular and resilient. Leveraged capital sentiment has recovered due to bottoming out of the two financing balances. Combined with monetary policy, the performance of the brokerage sector still has some certainty in the performance of the brokerage sector in the context of abundant liquidity. It is recommended that priority be given to leading leaders with sufficient performance flexibility, and at the same time pay due attention to small and medium bids with regional advantages and differentiated competitiveness on characteristic tracks.
The main views of China Post Securities are as follows:
Tracking industry fundamentals
In the last month, the Shibor3M interest rate showed remarkable characteristics of “slight fluctuations in the early period and absolute stability in the later stages.” According to the data provided, interest rates fluctuated slightly between 1.428% and 1.431% from July 24 to July 29, with a range-low of 1.431% recorded on July 29. Since July 30, the interest rate has been accurately anchored at the level of 1.43%, and continued to maintain this value until August 21, for 17 trading days, showing strong policy guidance or market consistency expectations. Currently, the focus of monetary policy is to provide a stable low interest rate environment for economic recovery, and the possibility of a shift in the short term is extremely low. It is expected that the central bank's open market operations will continue to “cut peaks and fill valleys” to maintain reasonable and abundant liquidity.
Stock base turnover in the last month showed the characteristics of “pulsed volume and central increase”. The turnover of funds in the Shanghai market reached a stage high of 417.751 billion yuan on July 31, the turnover of funds in Shenzhen reached 18.405 billion yuan on the same day, and the total transaction amount with Flush A reached a range peak of 2.65 trillion yuan on August 7. Although the total amount declined somewhat after mid-August, it remained above 2.3 trillion yuan, showing the resilience of the market's popularity. The current market sentiment has gradually recovered and is not overheated. Structural opportunities still exist under the stock game, and the current level of activity may be maintained in the short term.
In the last month, the balance of securities financing showed a trend of “holding back first and then rising”. After a rapid decline in July, the balance of the two loans fell to a range low of 2.603 trillion yuan by August 3. Since then, the balance stabilized and began to rise continuously, reaching $2.698 trillion on August 18, basically recovering previous losses. On August 19 and 20, it fell slightly to $2.668 trillion and $2.666 trillion.
The balance of the two loans bottomed out and rebounded, marking a shift in leveraged capital sentiment from pessimism to cautious optimism. The core driver may be the restoration of the money-making effect of the market. From the end of July to mid-August, the A-share market experienced a structural rebound, and the continued rise in some hot sectors attracted high-risk capital to enter the market.
The current market is likely to maintain a structured market. It is expected that leveraged capital will remain active but not excessively aggressive
The new Chinese debt composite index (total value) wealth index showed a strong bull market with a one-sided rise in the last month, with almost no correction. It reached a range-high of 256.07 points on August 19, and fell slightly to 256.02 points and 255.97 points on August 20 and 21. The index's upward slope is steep, showing strong momentum to go long in the bond market. The drivers of the bond bull market are multi-dimensional. The first factor is probably the expectation that the central bank will maintain an easy monetary policy, providing sufficient liquidity to the market. Second, inflation data continues to be sluggish, opening room for lower interest rates. Furthermore, institutional behavior is highly consistent. In the context of an “asset shortage,” insurance, financial management, fund and other institutions are under tremendous pressure to allocate funds and continue to buy bonds. Currently, the market has fully priced the beneficial factors. It is expected that profit markets will need to be digested in the short term, and further sharp increases or new catalysts will be needed.
Remains active at a high level in terms of turnover
The bond turnover between the two markets reached a peak of 3.24 trillion yuan on August 3. Since then, although the turnover of the two markets fluctuated, the central level was high, and the turnover stabilized at more than 2.9 trillion yuan. Overall, it showed the characteristics of continuous activity, which is highly consistent with the bullish bond market. It is expected that as long as there is no trend reversal in interest rates, market gaming and allocation demand will continue to support current transaction activity.
The yield on ten-year treasury bonds showed a clear downward trend in the last month
The yield continued to decline from over 1.74% in late July to a low of 1.6831% on August 19. On August 20 and 21, it rebounded slightly to 1.6832% and 1.6839%. The yield declined all the way from above 1.74% to around 1.68%, with a cumulative decline of more than 6 basis points, showing significant changes in the market's expectations of economic fundamentals and policies. The core driver of declining yields is likely to be the downturn in market expectations for economic growth. Economic data released since the end of July may indicate a marginal weakening of recovery momentum, compounded by moderate inflation data, strengthening market expectations for further monetary policy easing. Currently, the market's bullish sentiment prevails, but the yield is already at an extremely low level in history. A further sharp decline may require a new catalyst. The 10-year treasury bond yield is expected to fluctuate low in the 1.67%-1.70% range.
The interest rate spread between Shanghai and Shenzhen 300 shares fluctuated widely in the range of 5.03% to 5.20%
The interest rate spread on July 23 was 5.03%, which is low in the range. It then climbed rapidly, reaching a range-high of 5.20% on August 4. Since then, the spread has repeatedly dragged between 5.07% and 5.18%. The key turning point occurred on August 4. Interest spreads failed to reach an effective breakthrough after hitting a high point, indicating that the relative attractiveness of equity assets faced strong resistance in this position. The overall trajectory shows a “rush high - shock” pattern, with sharp fluctuations. The core driver of interest rate spread fluctuations is the struggle between the numerator side (profit expectations) and the denominator side (risk-free interest rate). On the one hand, the continued decline in ten-year treasury bond yields (on the denominator side) is the main force driving up interest spreads. On the other hand, the fluctuation in the Shanghai and Shenzhen 300 Index itself reflects the market's pessimistic expectations for future profit growth (on the molecular side) of listed companies. Currently, profit expectations on the molecular side are difficult to systematically reverse in the short term, and interest rates on the denominator side also lack a basis for a sharp rise, and interest spreads are expected to maintain a volatile pattern.
Risk warning:
Subsequent transactions were unable to maintain a high level, and the market pullback exceeded expectations.