Since China Everbright Bank Company Limited Co.Ltd(601818) took the lead in announcing “self purchase”, Nanyin financial management also joined it a few days ago. For the recent frequent holdings increase actions of bank financial subsidiaries, insiders pointed out that under the background of large-scale “net breaking” of products, the recent self purchase actions of bank financial subsidiaries help to stabilize the confidence and expectations of investors holding relevant products, and cultivate the concept of adhering to value investment and long-term investment after breaking the “just exchange”.
two financial management subsidiaries announced self purchase
Since the self purchase of public funds and asset management of securities companies, bank financial management subsidiaries have also begun to take action. Everbright financial first issued an announcement last week, sounding the horn of increasing its holdings of financial products. It plans to invest no more than 200 million yuan of its own funds in its issued financial products, which is the first self purchase action of its financial subsidiary.
At present, Everbright wealth management includes seven types of assets, including equity, hybrid, fixed income, cash management, alternative assets, private equity and structured investment and financing products. Before the announcement, the investment of Everbright financial’s own funds was mainly based on fixed income and cash assets, supplemented by other types of asset allocation. This time, Everbright financial purchased its own sunshine red equity products and sunshine orange mixed products.
Everbright wealth management related people told the reporter of Securities Daily that increasing the holdings of its products is not only the confidence in the resilience of China’s capital market, but also the trust in its own investment and research ability.
Nanyin wealth management followed Everbright wealth management and announced the self purchase plan. Nanyin financial management announced that it has invested about 500 million yuan of its own funds to subscribe / subscribe for the company’s financial products.
“The purpose of self purchase by many financial subsidiaries is to deal with the net value withdrawal of some bank financial products, especially ‘fixed income +’ financial products, which is related to enhancing investor confidence and cultivating customers to participate in the investment of net value financial products.” Kong Xiang, chief analyst of Societe Generale research financial industry, said in an interview with the reporter of Securities Daily that since 2022, the sharp fluctuation of A-share market has significantly affected the net value performance of public funds and bank financial products. The frequent occurrence of income shrinkage and “net breaking” has led to the redemption pressure of bank financial products and public funds. While it has a significant impact on equity public funds, the bank financial products with certain equity positions of “fixed income +” have also been impacted. Although the actual effect of this operation on unit net worth is relatively limited, it conveys good expectations and reflects the strong belief of overcoming difficulties with customers.
In fact, Everbright financial performed well last year. In 2021, Everbright financial realized a net profit of 1.586 billion yuan, a significant increase of 181.21% over 564 million yuan in 2020. By the end of last year, the total scale of Everbright financial management assets had exceeded trillion yuan, reaching 1.07 trillion yuan, with total assets of 7.475 billion yuan.
“The historical development trend of bank asset management and wealth management has not changed, and we are still optimistic about the continuous growth of the performance of financial management subsidiaries.” Kong Xiang said that on the whole, bank financial management is still a risk aversion tool with high market recognition. Bank financial products with violent market fluctuations and low-risk characteristics are expected to still receive incremental funds.
Dong Cuihua, a researcher of Puyi standard, told the Securities Daily that in the face of the current market environment, financial subsidiaries should do a good job in product risk control, track the performance of underlying assets, adjust the investment portfolio in time, reduce the position of risk assets and control the withdrawal range of products. In addition, we should appropriately lengthen the product investment cycle, guide investors to hold for a long time, and smooth the income by lengthening the product investment period.
rationally view the “breaking net” of financial products
Statistics show that as of March 27, 2022, up to 2702 bank financial products (duration) have a net unit value of “less than 1”, accounting for about 8%. The proportion of “net breaking” products issued by bank financial subsidiaries is higher. The number of “net breaking” products issued by financial subsidiaries reaches 1734, accounting for 15% of the 11548 products with disclosed net value data.
Dong Cuihua believes that it is normal for financial products to have large net value fluctuations in the short term. Investors should rationally view the frequent “net breaking” of bank financial products, correctly understand the net worth transformation of financial products returning to the market, select suitable products, do a good job in risk control, and establish the concept of long-term investment and value investment.
Kong Xiang said that on the one hand, the impact of the sharp return of product net value on bank financial products is weaker than that of public funds. On the other hand, there is a significant difference between the customer experience and the past era of rigid cashing. In the future, bank financial management subsidiaries should explore transformation and adjustment in the dimensions of asset allocation, product creation and product sales. He believes that in the long run, the recent market adjustment provides a rare window for the asset management and wealth management departments of commercial banks to strengthen investor education, issue financial products with long debt maturity, such as pension financial products, and build an asset allocation system and product sales system “centered on the interests of customers”. Through the reform of relevant dimensions, it is conducive for bank financial investors to gradually get rid of the concept of “rigid cashing”, and bring more space for the comprehensive development of financial business in the era after the new regulations of asset management.
