At about 13:00 on March 16, Xinhua News Agency announced that the financial stability and Development Commission of the State Council (hereinafter referred to as the “financial commission of the State Council”) held a special meeting to study the current economic situation and capital market problems. As of 17:00 on March 20, in the 100 hours or so, a series of favorable policies have made strong “assists”, and financial institutions have also rushed to convey confidence to investors and made every effort to maintain the smooth operation of the capital market.
support policies emerge repeatedly
escort capital market
Within four hours after the announcement of the special meeting held by the financial commission of the State Council, the bank and the two sessions responded quickly, studied and deployed relevant work, and made every effort to maintain the smooth operation of the capital market.
Two hours after the announcement, the central bank said that it would further strengthen inter departmental policy coordination, respond to hot issues of market concern in a timely manner, stabilize expectations, boost confidence, maintain the steady and healthy development of China’s economy and jointly maintain the stable development of the capital market.
Subsequently, the CBRC said that it should actively support the smooth operation of the capital market. Actively introduce policies favorable to the market.
The Party committee of the CSRC quickly held an enlarged meeting and stressed that it would effectively improve its political position in accordance with the deployment requirements of the financial commission of the State Council, closely follow the theme of promoting high-quality development, further deepen and refine various work measures, strive to achieve results and fully maintain the stable operation of the capital market. Since then, the official website of the CSRC said that it is working with relevant ministries and commissions to further promote the pilot of infrastructure REITs, improve the system and mechanism, broaden the scope of the pilot, give better play to the functional role of public offering REITs, further promote the virtuous cycle of investment and financing and help the development of the real economy.
Tian Lihui, Dean of the Financial Development Research Institute of Nankai University, told the Securities Daily: “favorable policies have emerged one after another, reflecting the attitude of regulators to take care of the market.”
In addition, China Clearing, Shanghai and Shenzhen stock exchanges and other departments have also expressed their position to decompose and implement the policy requirements.
Nearly 24 hours after the news of the special meeting held by the financial commission of the State Council was announced, China Clearing said that in order to reduce the cost of market funds and serve the healthy development of the real economy, China Clearing cooperated with the ongoing DVP reform and reduced the payment proportion of the minimum settlement provision for stock business from 18% to 16% from April 2022. At the same time, some registration and settlement fees will be reduced and exempted from April 1.
Tian Lihui believes that the decrease in the proportion of reserves is mainly due to the release of capital market funds, so that institutional traders such as securities companies can obtain more funds available in hand, which can increase self-supporting operation and obtain profits under the background of low market valuation.
In an interview with the Securities Daily, Li Zhan, chief economist of China Merchants Fund Research Department, said that in the short term, reducing the payment proportion of the minimum settlement reserve of stock business can release tens of billions of yuan of funds. These funds can strengthen the self operation of securities companies and can be converted into “bottom reading” funds in the short term to avoid the irrational decline of the market.
In the medium term, the profitability of Chinese securities companies is relatively insufficient. Adjusting and relaxing the capital restrictions of securities companies is equivalent to “disguised” reducing the capital demand of securities companies, which can significantly improve the profitability of securities companies and strengthen the capital strength of securities market makers and financial intermediaries; In the long run, reducing the payment proportion of the minimum settlement provision for stock business will improve the capital utilization efficiency of securities companies, reduce the cost of securities companies engaged in brokerage business, guide securities companies to do a good job in their main business and serve the majority of investors.
In order to fully serve entity enterprises, the three major exchanges of Beijing, Shanghai and Shenzhen have successively issued notices on reducing and exempting relevant fees of Listed Companies in 2022. In addition, the Shanghai and Shenzhen Stock Exchange also said that it was actively cooperating with the CSRC, and was continuously committed to further promoting the pilot of infrastructure REITs and steadily developing the REITs market.
Chen Li, chief economist of Chuancai securities and director of the Research Institute, said in an interview with Securities Daily that it is expected that the subsequent introduction of positive fiscal, financial and real industrial policies will help China’s overall economic development to improve steadily and restore market confidence.
securities companies released “warm” Research Report
bank reassures investors
At the same time, we should act quickly and actively respond to the policy requirements of financial institutions.
Public fund companies have proved to the market their confidence in China’s capital market for a long time by purchasing their own funds with real gold and silver. According to incomplete statistics by the reporter of Securities Daily, from March 17 to March 20, many fund companies such as China Europe Fund, e fund and Zhonggeng fund have started self purchase. Fund companies generally said that based on their firm confidence in the long-term healthy and stable development of China’s capital market, the current investment cost performance of A-Shares is relatively high.
At the same time, securities companies actively released “warm” research reports to improve their attention to listed companies and take practical actions to protect the market.
For example, Chen Guo, chief strategist of China Securities Co.Ltd(601066) securities, believes that the special meeting held by the financial commission of the State Council expressed firm support for steady growth and defined the future development direction of the real estate market. At the same time, China concept stocks, platform economy, Hong Kong stocks and other issues concerned by the market have been clearly identified, which has become the “policy reassurance” in these key areas Sealand Securities Co.Ltd(000750) said that the tone of the policy to protect the market was clear. After the substantial adjustment in the early stage, the valuation level of the market decreased significantly, showing a good cost performance. Ping An Securities believes that the special meeting held by the financial commission of the State Council is at the right time: first, stabilize economic expectations and strengthen the promotion of steady growth policies. Second, stabilize real estate expectations, and the scheme to resolve real estate risks will be overweight. Third, it is expected that the cooperation with overseas capital markets will continue.
The reporter of Securities Daily found in the search with “research” as the keyword. Based on the announcement date, 161 A-share listed companies disclosed institutional research announcements from March 17 to March 20 (as of 15:00).
“Funds, securities companies and other institutions are important participants in the capital market, and their cognition and behavior can guide the market. Self purchase of funds and bullish securities companies help to improve investors’ confidence in the capital market.” Tian Lihui believes that under the background that other conditions remain unchanged, the behavior of institutions to convey confidence to investors is a clear positive, which helps to promote the recovery or upward movement of the market.
In addition, a number of banks passed policy confidence to investors in financial products and gave “hold” suggestions.
For example, at 13:00 on March 20, the reporter called the account manager of a business department in Fengtai District of China Merchants Bank Co.Ltd(600036) Beijing as an investor to inquire about “how policy support affects the market”. The other party replied, “the market has improved recently, and the bank’s financial products are still very stable. It is recommended that customers continue to hold them.”
Subsequently, the reporter consulted the customer manager of a business department in Xicheng District of Industrial And Commercial Bank Of China Limited(601398) Beijing with the same question. The other party said, “please rest assured that the market will stabilize.”
There are also individual investors asking questions to institutions on the interactive platform of Shanghai and Shenzhen Stock Exchange. For the question of “how to give investor confidence”, a securities firm replied that the company will seriously implement the spirit of the special meeting of the financial commission of the State Council, serve entities and people’s livelihood, practice three innovations and achieve high-quality development, so as to play a role in stabilizing the market. The company strives to strengthen operation and management to improve performance and shareholder return, and promote the discovery and recognition of the company’s investment value by the market.
“At present, all parties have taken effective measures in terms of policy guidance, confidence boost and financial support.” Li Zhan said.
