The deepening degree of institutionalization is a remarkable feature of the development of A-Shares in recent years. The steady monetary policy, new asset management regulations and the policy combination of “housing, housing and non speculation” boost the allocation of residents’ rights and interests; Under the comprehensive registration system, the supply of securities is improved, the supply and demand is more balanced, the beta attribute of the A-share market is weakened, and the alpha attribute is enhanced, further boosting the institutionalization. In this context, the scale of public funds and private funds increased rapidly, and the degree of A-share institutionalization increased significantly.
Institutionalization promotes the prosperity of securities companies
The deepening degree of institutionalization is the direct reason for the improvement of the prosperity of securities companies in recent years. Under the trend of institutionalization, there are three types of businesses that have benefited significantly: (1) wealth management business that provides sales channels for asset management institutions and investment advisory services for customers; (2) Asset management business that provides active asset management services to customers as an asset management institution or through fund subsidiaries; (3) It is an institutional business that provides multi-dimensional services such as research, brokerage, custody, securities lending and OTC derivatives for institutional investors. The above three types of businesses are customer demand businesses, and the core is to operate customers. Relatively homogeneous channel businesses have higher requirements for professional ability, internal coordination and capital strength, and have better growth.
The catalytic effect of capital market reform and steady growth policy
The central economic work conference proposed that next year’s economic work should be stable and seek progress while maintaining stability, and mentioned the full implementation of the stock issuance registration system. The capital market reform represented by the comprehensive registration system will continue to promote the expansion of brokerage business space and bring greater development space for brokerage investment banking and private equity business. Under the policy tone of stability, monetary policy is expected to structurally broaden credit, so as to promote the stable development of A-share market. Capital market reform and steady growth policies are expected to play a catalytic role in improving the performance of bond businesses.
Roe in the securities industry is expected to continue to improve
Under the neutral assumption, the diluted roe of listed securities companies is expected to be 9.5% in 2021, an increase of 1.6 percentage points over 2020, the highest in recent five years. As the degree of A-share institutionalization is still deepening, the comprehensive registration system is expected to be further promoted in 2022. The stable macro policy environment is conducive to the stable development of the A-share market. It is expected that the roe of securities companies will be further improved in 2022.
Recommend head securities companies with advantages in institutional business
Since this year, the wealth management business and asset management business closely related to institutionalization have attracted high attention from the market. We believe that the rapid development of wealth management business, asset management business and institutional business is driven by the deepening of A-share institutionalization, and institutional business is expected to become the next consensus in the securities industry. We recommend leading securities companies with advantages in institutional business, such as Citic Securities Company Limited(600030) , China International Capital Corporation Limited(601995) , Huatai Securities Co.Ltd(601688) ; And East Money Information Co.Ltd(300059) with unique advantages in the field of wealth management.
（ Guosen Securities Co.Ltd(002736) ）
