event comments:
The market maker mechanism mainly affects: "the market maker system" is opposite to the "competitive trading system". The market maker makes transactions with the seller and the buyer in the market by continuously quoting the purchase price and the selling price. The securities firm earns the bid ask difference (or bears the loss), and there is no direct transaction between investors. The introduction of market makers helps to improve the price discovery function (valuation and pricing of science and innovation enterprises), improve market liquidity (liquidity differentiation of science and Innovation Board), and enhance market stability.
market maker risks and benefits coexist:
(1) market makers mainly face inventory risk, liquidity risk and operational risk. Among them, inventory risk refers to that the trading volume under bilateral quotation will not be exactly equal in the actual transaction, resulting in position exposure of market makers. Market makers can manage inventory risk by adjusting quotations or related hedging transactions. (2) The profit of market makers mainly comes from the spread income. The bid ask spread reflects the cost (or profit) of providing bilateral quotation services for market makers and compensates for the risks borne by market makers. The larger the trading volume of market making securities, the more market makers, and the bid ask spread will narrow. The regulations on "internal control" and "non-compliance" of the company for more than RMB 10 billion in recent three months have set strict requirements on the "internal control" and "non-compliance" of the company's net interest classification in the past three months, and have set strict requirements on the company's "internal control" and "non-compliance" of the company's net interest classification of more than RMB 10 billion in recent three months.
investment advice:
Market makers need to have the following abilities: first, strong capital strength to support daily transactions and some extreme situations. In addition, capital is also the core index of securities companies' risk management ability; Second, sufficient securities reserves and sources, as well as the management ability of securities treasury stocks, to meet daily transactions and bear Treasury risks; Third, continuous pricing and valuation ability, strong research and analysis support, especially the pricing ability for science and innovation industries and enterprises.
the probability of head securities companies entering the pilot range.
The seven top listed securities companies have been classified and evaluated as class a AA in the past three years. According to the recent net capital scale, they are respectively Citic Securities Company Limited(600030) (89.3 billion yuan), Guotai Junan Securities Co.Ltd(601211) (87.7 billion yuan), Huatai Securities Co.Ltd(601688) (74 billion yuan), Guosen Securities Co.Ltd(002736) (72.5 billion yuan), China Merchants Securities Co.Ltd(600999) (67.6 billion yuan), China Securities Co.Ltd(601066) (63.2 billion yuan) and China International Capital Corporation Limited(601995) (48 billion yuan).
qualified fund main market making securities companies may be easier to be shortlisted.
According to the Shanghai Stock Exchange, there are currently 14 fund main market makers, of which 11 listed securities companies' classified evaluation and net capital scale comply with the provisions on market making, including Citic Securities Company Limited(600030) , China Securities Co.Ltd(601066) , China International Capital Corporation Limited(601995) , Huatai Securities Co.Ltd(601688) , China Merchants Securities Co.Ltd(600999) , etc. the comprehensive evaluation result in 2020 is AA.
the securities companies leading the underwriting of Kechuang board have comparative advantages.
Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) , China Securities Co.Ltd(601066) and China International Capital Corporation Limited(601995) with their leading advantages in investment banking business, the number and amount of underwriting and follow-up investment on the science and Innovation Board rank first, and they have rich floating profits, with a yield of more than 70%.
securities companies with outstanding securities lending capacity have more abundant securities sources.
According to the mid-2021 report, Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) , China Securities Co.Ltd(601066) , China International Capital Corporation Limited(601995) financed securities exceeded 10 billion, accounting for 67% of the total disclosure scale; The total securities of Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) , China Securities Co.Ltd(601066) , Guotai Junan Securities Co.Ltd(601211) refinancing have exceeded 10 billion yuan, accounting for 78% of the total disclosure scale.
the short-term performance contribution is limited. It is recommended to pay attention to the head securities companies.
Overall, as an innovative business, the market making business of Kechuang board has relatively limited profit contribution in the short term and provides potential growth space in the long term. We still need to continue to pay attention to the supporting rules of Shanghai Stock Exchange. Risk control compliance ability has become the threshold index for pilot selection. At present, the classification evaluation system of securities companies still focuses on "supporting the excellent and limiting the bad", giving limited consideration to differentiation. The head securities companies have a higher probability of winning in the pilot selection, significant first mover advantage and more stable operation. It is recommended to pay attention to Citic Securities Company Limited(600030) , Huatai Securities Co.Ltd(601688) , China Securities Co.Ltd(601066) , China International Capital Corporation Limited(601995) , Guotai Junan Securities Co.Ltd(601211) , China Merchants Securities Co.Ltd(600999) and other head securities companies.
(source: financial Associated Press)
