On April 17, the brokerage stocks collectively rose sharply. The Wind Brokerage Index rose by nearly 3%. A number of market participants interviewed said that the resonance of two major factors has caused brokerage stocks to soar: on the one hand, after the performance of brokerages in 2022 has been under pressure, their performance in the first quarter of this year has rebounded significantly; On the positive side, the "fee reduction" is expected to further improve the efficiency of its capital utilization.
After experiencing the "squat" of performance and valuation in 2022, under the low base effect, with the release of the first quarterly report of securities firms in 2023, the first quarter performance of the securities industry is expected to "take off" as a whole. Judging from the first-quarter performance reports or first-quarter reports that have been published so far, the performance improvement of securities companies in the first quarter has considerable flexibility. According to public data, at that time, Zhongtai Securities, Founder Securities, Northeast Securities, Orient Securities, and Shenwan Hongyuan released the first quarter report or first quarter performance report for 2023, all of which completed the double growth of revenue and net profit in the first quarter, and the net profit rose the highest More than 500%.
The strong performance in the first quarter has become a direct catalyst for the stock price rise of listed securities firms. Brokerage stocks, whose performance has clearly increased significantly, were among the biggest gainers yesterday. Among them, Northeast Securities and Zhongtai Securities had their daily limit, and Shenwan Hongyuan rose by more than 6%.
In terms of policy, on the evening of April 10, my country Securities Finance Co., Ltd. issued an announcement stating that in order to further reduce the cost of securities companies' refinancing business, improve the efficiency of industry capital utilization and the level of refined and differentiated management of margins, the margin ratio of securities companies will be reduced. Among them, the share of refinancing deposits for companies with high credit ratings has been lowered from 20% to 5%, and the share of bond lending deposits for market-making on the Science and Technology Innovation Board has been lowered from 10% to 5%.
On April 7, my country Settlement issued an announcement saying that in order to further improve the efficiency of market capital utilization and the level of refined management of settlement reserves, it plans to officially launch the differential reduction of the minimum settlement reserve fund payment share for stock transactions, and will complete the stock transaction. The minimum reserve payment ratio for similar transactions has dropped from 16% to about 15% on average.
The reduction of the minimum settlement reserve ratio and the refinancing deposit, etc., is expected to release a total of 39.4 billion yuan of funds for securities companies, accounting for 1.4% of the net assets of the industry at the end of 2022, which will help improve the efficiency of securities companies' capital utilization.
Many institutions believe that with the significant increase in market trading activity, the brokerage sector will benefit significantly. Among them, brokerage firms with greater performance recovery flexibility have better trading logic.
Nine Dragons Securities stated that the market's perception of the brokerage sector mainly lies in the short-term transaction value. At present, the allocation value of the securities industry has not yet been fully recognized by the market, and the investment in brokerage stocks is in a critical transition period from transaction value to allocation value. With reference to the historical valuation distribution, the current low valuation of brokerage stocks fully reflects the limited downward space and predictable upward flexibility of the securities sector.
The policy dividends of securities companies are expected to continue to be implemented in the future: first, third-party diversion may be expected to be implemented, and cooperation channels such as the securities industry, Internet channels, and other financial licenses within the group will be unblocked; Policies for further reform and improvement are expected to be introduced, which will promote the steady development and growth of the capital market.