Compared with the financing business of up to trillion yuan, the development of securities lending business in A-share market lags behind. As of December 9, the balance of securities lending in Shanghai and Shenzhen stock markets was 119.8 billion yuan, and the financing balance was 172.5 billion yuan.
With the increase of securities supply and the creation of securities circulation platform by securities companies, this imbalance is gradually improving. Recently, insurance funds have been approved to participate in securities lending business, which is expected to further broaden the securities source channels and activate the securities lending business of securities companies.
“Insurance institutions are allowed to participate in securities lending business, which has brought a new and huge business opportunity to securities companies.” The interviewed brokers believe that in the competition of insurance institutions, whoever is more active, who moves faster and who has stronger resource coordination ability can seize the opportunity and add more “fuel” to the rapid development of securities lending business.
The supply of bonds increased significantly
Since its opening in 2010, China’s margin trading business has been in an unbalanced state of strong margin trading and weak margin trading for a long time. The reason is that the insufficient supply of bonds is a major restrictive factor.
In recent years, the supply of securities sources has increased significantly, and the securities lending business has ushered in new opportunities for development: first, the enthusiasm of public funds and private funds to participate in refinancing securities lending has increased since early March 2020; Second, the new QFII regulations came into effect in early November 2020, and QFII refinancing and lending increased; Third, shareholders of listed companies actively provide refinancing securities and lend more; Fourth, insurance funds were allowed to participate in securities lending business, further expanding the supply of securities.
Compared with public offering, private placement and other institutions, the investment time limit of insurance funds is longer, and its bottom position assets can support a longer lending period, which is also easy to win the favor of more securities lending customers.
The relevant person in charge of Changjiang Securities Company Limited(000783) said that in Japan, which is also a centralized credit granting model, insurance funds are the main securities lenders. Combined with overseas market experience, insurance funds are allowed to participate in securities lending, which is conducive to further increase the supply of securities sources and promote the marketization of securities lending business.
Gf Securities Co.Ltd(000776) said that the refinancing and lending business of insurance funds is another blue ocean for securities companies. With the enrichment and improvement of securities sources, the demand for securities sources of investment strategies related to securities lending will be further met, and more investment strategies will be derived according to the new characteristics of securities sources, which is also conducive to securities companies to provide better services for investors with securities lending needs.
“At present, we have conducted one-to-one communication with the headquarters of several large and medium-sized insurance institutions. After insurance funds participate in lending securities, it will further enrich the company’s securities supply.” The person in charge of margin trading said.
business competition pattern or change
The industry concentration of securities lending business is high, and the advantages of head securities companies are prominent. Will the expansion of securities sources change the ecology of stock securities lending business and stir up the competition pattern of the industry?
Huatai Securities Co.Ltd(601688) the person in charge of margin trading believes that when insurance funds apply for participation in domestic refinancing securities lending business through agreement, there are clear provisions on the net assets and classification rating of securities lending companies, which is conducive to the concentration of business to head institutions to a certain extent.
“Concentration does not mean monopoly. As a new participant, insurance funds will help to improve the ecological pattern of stock securities lending business, attract more securities lending customers to participate, and improve the liquidity and activity of the overall market.” The official said.
Jia Guoliang, director of retail business, general manager of credit business department and general manager of private wealth department, said that after the development of recent years, the securities lending business has formed an oligarch competition pattern, and the business concentration is significantly higher than that of financing. The entry of insurance funds is conducive to the overtaking of medium-sized securities companies in the curve and break the monopoly pattern of head securities companies on securities sources.
“At present, the scale of China’s securities lending business is still in its infancy. The overall scale of securities lending business is small and there is great room for development.” Gf Securities Co.Ltd(000776) said that the participation of insurance funds in refinancing business will further enrich the main body of securities lending, enrich the supply of securities sources, provide more resources and support for securities companies to carry out relevant businesses, and provide more types and larger securities sources for downstream securities lending customers. In the future, how to make good use of securities lending sources such as insurance funds to meet the needs of downstream securities lending customers will be a new topic for securities companies.
platform operation and coupon pool management are the key
Securities lending business is a business that tests the comprehensive competitiveness of securities companies and the cooperation ability of various business lines. Under the new competition pattern, how can securities companies “show their skills” to seize the market share of securities lending?
The relevant person in charge said that the core competitiveness of securities companies to seize market share is reflected in two aspects: expanding the number of lenders and improving the use efficiency of securities sources. In terms of expanding the number of lenders, Changjiang Securities Company Limited(000783) relying on the powerful seller research platform and institutional sales system, has established extensive cooperative relations with public and private institutions, providing a wide range of institutional securities sources with rich varieties and broad coverage. In terms of improving the use efficiency of coupon sources, Changjiang Securities Company Limited(000783) has launched the independent coupon appointment system and the independent coupon borrowing system.
According to the person in charge of Huatai Securities Co.Ltd(601688) margin trading business, the core competitiveness is mainly reflected in the platform operation ability, customer development ability and securities pool management ability. Among them, in terms of platform operation capacity, Huatai Securities Co.Ltd(601688) “securities lending” platform currently has 10000 registered users, the cumulative entrusted amount has exceeded 500 billion yuan, the cumulative transaction amount has exceeded 180 billion yuan, and the peak balance of securities lending has exceeded 30 billion yuan.
China Merchants Securities Co.Ltd(600999) the person in charge of margin trading department emphasizes the importance of “synergy”. According to him, China Merchants Securities Co.Ltd(600999) on the issue of bond source, on the one hand, relying on the background of shareholders, all business segments within the group can cooperate to participate in the lending business. On the other hand, China Merchants Securities Co.Ltd(600999) has maintained a good cooperative relationship with all lending entities in the market, and has rich coupon source reserves, which can help lending customers match the demand side of coupon source faster.
Gf Securities Co.Ltd(000776) said that building the core competitiveness of securities lending business requires high comprehensive strength of securities companies, which not only requires securities companies to have extensive cooperation and interaction with many securities source institutions and obtain rich securities sources, but also requires securities companies to have the ability to serve end customers and operate securities lending, but also requires securities companies to invest large IT resources in securities lending business.
(Shanghai Securities News)
