On the first trading day of the year of the tiger, the two A-share markets opened higher and walked higher, and the banking sector also ushered in a major outbreak. As of the closing on February 7, Industrial Bank Co.Ltd(601166) rose by more than 5%, and more than 10 stocks such as Bank Of Ningbo Co.Ltd(002142) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , China Merchants Bank Co.Ltd(600036) rose by more than 3%.
Since January, the performance of A-share listed banks has gathered to report good news. With the favor of funds, the bank index has significantly outperformed the market, becoming the “dark horse sector” with the best performance in the new year. During the Spring Festival holiday, driven by the external market and other factors, bank stocks have been shining in the Hong Kong stock market, and domestic bank stocks have performed well. According to the general analysis of institutional people, the market expectation is expected to remain optimistic in the process of gradually adding weight to the relevant policies of “stable growth”.
Dai Zhifeng, director of Zhongtai Securities Co.Ltd(600918) Research Institute, also analyzed the first financial reporter, adding that the current market risk appetite is not high, the performance of banks that underestimate the value and are expected to succeed in transformation is worth looking forward to.
Bank H shares and A-Shares made a good start
Bank stocks, which rose sharply against the trend before the Spring Festival, continued to be elated. On February 7, after the three major A-share indexes rose, the trend differentiated. The gem index, which rose 2.7% at the beginning of the session, closed up 0.31% after turning green at the end of the session, and the Shanghai index and Shenzhen Composite Index rose 2.03% and 0.96% respectively. Under the general upward trend of individual stocks, the main funds continued to increase their positions in construction, banking and other sectors. As of the closing, the bank’s shenwanyi industry index rose 3.16%, of which Industrial Bank Co.Ltd(601166) rose 5.41%, and Bank Of Ningbo Co.Ltd(002142) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , China Merchants Bank Co.Ltd(600036) , Bank Of Chengdu Co.Ltd(601838) , Bank Of Hangzhou Co.Ltd(600926) rose more than 4%, while Wuxi Rural Commercial Bank Co.Ltd(600908) , Ping An Bank Co.Ltd(000001) , Xiamen Bank Co.Ltd(601187) , Bank Of Jiangsu Co.Ltd(600919) and other stocks rose more than 3%.
Since 2022, the whole banking sector has once risen by nearly 7%, and has since been corrected. According to wind data, as of Monday’s close, banks were still the biggest gainer among the 31 shenwanyi industries, rising 5.56% even though the market fell nearly 6%, becoming the “most anti falling” sector in the new year. Among them, Bank Of Chengdu Co.Ltd(601838) rose by 21.67%, Bank Of Jiangsu Co.Ltd(600919) , Industrial Bank Co.Ltd(601166) rose by 16.64% and 15.60% respectively, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Hangzhou Co.Ltd(600926) , Postal Savings Bank Of China Co.Ltd(601658) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , Bank Of Nanjing Co.Ltd(601009) all rose by more than 10%.
In fact, the market has expected the post holiday performance of banks and even the whole A shares. During the Spring Festival, the peripheral markets strengthened collectively, and Hong Kong stocks also made a good start in the year of the tiger. Among them, the wind Hong Kong bank index and Hang Seng China bank index rose by 2.45% and 1.86% respectively on January 31 (half day) and February 4. Chongqing rural commercial bank, China Merchants Bank Co.Ltd(600036) , China Zheshang Bank Co.Ltd(601916) and other domestic bank stocks performed well.
According to the general analysis of institutions, the outstanding performance of the secondary market of bank stocks is mainly supported by the certainty of the macro environment and the rebound of fundamentals beyond expectations. Since January, the performance express reports of major listed banks have gathered together to report good news. Among the 19 banks that have disclosed data, the growth rate of net profit attributable to the parent has exceeded 20%, of which Bank Of Jiangsu Co.Ltd(600919) net profit has increased by 30.72% year-on-year. While continuing to lead peers, it has reached a new high in recent 10 years, and the impact of the epidemic on interest rate spread and bad debts has gradually dissipated. On the other hand, the current central and some local policies on “steady growth” continue to increase, and the market expectation is optimistic.
“Everyone has expectations for steady growth, and the social finance in January should also be good; on the other hand, the market risk appetite is not high, so the undervalued sectors will benefit more.” Dai Zhifeng told reporters that there are two main factors behind the sharp rise of bank stocks.
According to the statistics of the first financial reporter, although the net breaking rate of the banking sector has decreased recently, the overall Pb (price to book ratio) of the sector is still at a historical low, and the probability of obtaining additional funds is high.
bank stocks will become a “sharp tool for risk avoidance”, key support 2 points
Looking forward to the future, according to the analysis of many institutions, the first quarter is an important time window for the steady growth policy. Under the background of “steady growth, stable credit and stable expectation”, the bank stocks have strong certainty and will become a “risk aversion weapon” .
Dai Zhifeng said that as long as the steady economic growth continues, the future market of bank stocks is still worth looking forward to, and the banks that underestimate the value and are expected to succeed in transformation are the main allocation direction. Previously, Yan Meizhi, head of China financial industry research at UBS, said that although the net interest margin of the banking industry will continue to be under pressure in 2022, it can still maintain stable performance growth compared with 2021. Especially under the risk aversion feature, the probability of the secondary market will follow the fundamentals first strong and then weak, and is optimistic about the market in the first quarter.
Citic Securities Company Limited(600030) bank analysts Xiao Feifei and Bloomberg pointed out that the logical chain of the improvement of “loose policy – economic prosperity – credit risk expectation” of bank stocks is in the strengthening period. It is expected that the market’s concerns about economic and credit risks still exist from January to February, but the uncertainty of medium-term risk factors is decreasing. It is suggested to pay attention to the allocation value of the whole year dimension of the banking sector. Previously, following the central bank’s overall standard cut of 0.5 percentage points and the reduction of 10bp (basis points) of one-year MLF (medium-term lending convenience) interest rate, the one-year and five-year LPR (quoted interest rate in the loan market) were both reduced. Compared with the impact of low interest rate on the net interest margin, most institutions looked at the credit demand under the background of the recovery of mortgage loans in the first quarter and the “good start” of credit. Guosen Securities Co.Ltd(002736) bank analyst Wang Jian also said that after the interest rate cut, the reduction of credit cost caused by the improvement of asset quality will far exceed the fluctuation of net interest margin.
From the signal of regulatory release, wide credit has been relatively determined in the first half of the year. Li Qilin, director and chief economist of Hongta Securities Co.Ltd(601236) Research Institute, believes that the broad currency market will continue until the demand for physical financing picks up and the broad credit market takes effect. In addition, if the broad credit market is less than expected, it is not ruled out that there is the possibility of further interest rate cuts in the future.
The attitude of domestic and foreign institutional funds towards mainland bank stocks has changed. According to the analysis of Tianfeng Securities Co.Ltd(601162) , undervalued value + high dividend yield, the attraction of the banking sector to long-term funds is becoming more and more obvious . According to the four seasons report of domestic public funds, although the overall position is still low, many star fund managers have begun to increase their positions in bank stocks since the third quarter of last year. Qiu Dongrong of Zhonggeng fund made it clear that he continued to be optimistic about bank stocks with “stable operation, low fundamental risk, low valuation and high growth”. He increased his positions in Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) and other rural commercial banks in the fourth quarter. Previously, some analysts said that local small and medium-sized banks with obvious location advantages and local characteristics have more growth potential in the future, especially in the context of retail transformation. With the significant improvement of the prosperity and stock price performance of the sector, Xiao Feifei’s team pointed out that it is expected that the public funds will continue to pay more attention to bank stocks, which is expected to bring a virtuous circle.
In the last month, northbound capital has continued to net buy bank shares of about 19 billion yuan, ranking first in 31 mainstream industries, of which the most popular China Merchants Bank Co.Ltd(600036) received a net purchase of more than 500 million yuan on February 7. According to the data of Citic Securities Company Limited(600030) , in late January, the market value of A-share banking sector of northbound capital accounted for the highest proportion, reaching 3.21%, the highest level in history. In addition, the first foreign fund raised by the world’s largest information management giant, the new fund of China’s new fund, is also in the fourth quarter of last year, with the focus on electronic, banking, Baijiu, bio pharmaceutical and other sectors, of which China Merchants Bank Co.Ltd(600036) (6 million 340 thousand and 400 shares) and Industrial Bank Co.Ltd(601166) (14 million 166 thousand and 200 shares) are third, fifth largest ones.
Xun Yugen, chief strategist of Haitong Securities Company Limited(600837) strategy, said in a recent research report that the market decline in January was due to concerns about China’s steady growth, overseas interest rate hikes and tense relations between Russia and Ukraine. The spring market was only late and would not be absent. Steady growth spring market tends to grow after value, such as undervalued financial real estate and high prosperity hard technology (new infrastructure).
