On March 18, China Industrial Securities Co.Ltd(601377) , Dongxing Securities Corporation Limited(601198) made the latest progress in bond financing.
China Industrial Securities Co.Ltd(601377) the 5 billion subordinated corporate bonds publicly issued to professional investors were approved by the CSRC, and the first phase of 1 billion 91 day short-term financing bonds of Dongxing Securities Corporation Limited(601198) 22 years was successfully issued. On the whole, the bond financing scale of the securities industry has reached 247.3 billion yuan this year, among which the financing demand of leading securities companies is stronger, among which the bond financing scale of galaxy securities, Guosen Securities Co.Ltd(002736) , Haitong Securities Company Limited(600837) , Shenwan Hongyuan Group Co.Ltd(000166) , China Securities Co.Ltd(601066) , etc. ranks first.
2022 bond financing scale of securities companies was 247.28 billion, significantly lower than the previous month
According to the statistics of the associated press, the company’s short-term bond issuance was RMB 330.7 billion, a decrease of about 1.87% over the same period in 2021, according to the data of the associated press.
In terms of bond category, the scale of corporate bonds issued by securities companies and short-term securities lending decreased in 2022. Compared with the same period, the issuance scale of corporate bonds in 2022 reached 169.18 billion yuan, a decrease of 17.7% over the same period last year; The issuance scale of short-term financing in 2022 was 78.1 billion yuan, a decrease of 37.2% over the same period last year.
Compared with the data of the same period last year, the biggest difference lies in the net financing amount of securities companies. As of March 18 this year, the total repayment amount of securities companies’ bonds was 228.06 billion yuan and the net financing amount was 19.22 billion yuan. In the same period last year, the total repayment amount of securities companies’ bonds was 184465 billion yuan and the net financing amount was 145.7 billion yuan. Net financing decreased by 126.48 billion yuan, or 86.8%.
The decrease in the net financing amount of bonds is mainly due to the centralized maturity of securities corporate bonds issued from 2019 to 2020. During the year, the total repayment of short-term financing bonds reached 195.06 billion yuan, and the net financing amount was – 25.88 billion yuan.
term preference changed, and the proportion of medium and long-term bonds increased
In terms of term structure, short-term financing accounted for 31.58%, down from 37.72% in the same period in 2021. The proportion of medium and long-term bonds increased. For the short-term financing issued by securities companies during the year, on July 23 last year, the central bank announced a new version of the short-term financing management measures for securities companies, which extended the maximum term of short-term financing bonds. Many securities companies issued short-term financing with a term of one year. According to the statistics of the financial Associated Press, six of the 45 short-term financing issued this year are one-year short-term financing products.
After the issuance scale of short-term financing bonds increased rapidly to 798.3 billion yuan in 2020, the issuance scale of short-term financing bonds has been significantly reduced since 2021, with a year-on-year decrease of about 25.63% to 593.7 billion yuan in 2021. The scale and proportion of short-term financing issuance will further decrease in 2022, and securities companies show a preference for medium and long-term bonds in the selection of bond term.
bond financing resources concentrated to head securities companies
According to the statistics of the financial Associated Press, since the beginning of the year, a total of 47 securities companies have financed through creditor’s rights, with an average financing amount of about 5.2 billion, of which Galaxy Securities, Guosen Securities Co.Ltd(002736) , Haitong Securities Company Limited(600837) , Shenwan Hongyuan Group Co.Ltd(000166) securities, China Securities Co.Ltd(601066) securities ranked first in bond issuance during the year. It can be seen from the data that the issuance scale of the top five securities companies totals 81.58 billion, accounting for about 33%, and the issuance scale of the top ten securities companies totals 135.98 billion, accounting for about 55%. The issuance of creditor’s rights shows a centralized trend, especially to the top securities companies. The main influencing factors are the regulatory authorities’ requirements on the issuance threshold and liquidity management of securities corporate bonds and short-term financing bonds, as well as the recognition of investors in the issuance market. The bond financing resources obviously flow to the head securities companies.
changes in the financing market may aggravate the differentiation of the securities industry
Compared with traditional banking institutions, securities companies, especially the head securities companies with large scale and better performance, have stronger flexibility in the use of funds, smoother liquidity transmission and wider use of funds, which can provide services for small and medium-sized non bank institutions. Through these high-quality securities companies to issue bonds for financing, part of the funds raised can be used to adjust the securities companies’ own business, such as expanding to capital intermediary and capital investment and increasing the investment in credit trading business. The other part of the funds can also be invested in other physical industries, which is conducive to the flexible use of funds. In particular, the types of bonds issued by large and medium-sized securities companies are short-term securities lending, with short issuance period and strong rolling, which can timely supplement liquidity and optimize the leverage structure of non bank institutions.
On the other hand, according to Luo zuihui, an analyst of Western Securities Co.Ltd(002673) non bank, “in the next five years, we believe that the level of roe in the securities industry can be steadily improved, which mainly depends on the improvement of ROA level by wealth management in asset light business and the steady improvement of leverage in asset heavy business before risk control.” Securities companies still have the motivation to improve roe indicators by increasing leverage.
According to the statistics of the financial Associated Press, at present, the overall leverage ratio of the securities sector (excluding customer margin) is 3.9 times, and there is still much room for improvement. On the whole, the head securities companies have more ability and power to add leverage, and the improvement of the leverage ratio of securities companies is mainly contributed by the head securities companies.
The change of financing environment puts forward higher requirements for the financing ability of various securities companies. At this point, the head securities companies naturally have great advantages, which may lead to the intensification of industry differentiation. However, if small and medium-sized securities companies can timely adapt to environmental changes, give full play to their own characteristics and constantly optimize the capital structure, it will also be an opportunity to overtake on the curve.
