Recently, the principle of strategic investors lending restricted shares as a source of securities lending has been hotly discussed in the market. Many investors are worried that as most of the securities sources of new shares are controlled by quantitative private equity, the new strategy of quantitative private equity securities lending may become the main reason for the continuous decline after the first day of IPO rises.
Is the distribution of bond sources unfair? What is the impact of the new securities lending strategy on the trend of new stocks? To this end, a reporter from the Securities Times interviewed different participants from multiple angles and listened to the voice of the market.
Have you found the reason for the sluggishness of new stocks?
The registration system has been implemented for more than four years, and most of the new stocks in the initial stage of listing have a pattern of "surge on the first day, followed by a fluctuating decline".
Some market participants questioned that quantitative institutions may use their advantages in capital and resources to monopolize the source of new stock securities through strategic allotment arrangements, and then raise the stock price on the first day of the new stock listing and then sell the securities to obtain excess profits. was "harvested" in the successive declines.
A quantitative private equity firm in Jiangsu and Zhejiang provinces agrees with some of the above views. Due to the small number of new shares in circulation, theoretically, quantitative institutions can raise the stock price through capital advantages and then sell securities. However, this requires the coordination of multiple parties and is difficult to operate.
The person in charge of the IPO business of a private equity company worth tens of billions in Shanghai further explained the process to a reporter from the Securities Times in detail, and believed that the above-mentioned approach is possible in theory, but in practice, quantitative institutions have to face more difficulties, such as whether they can grab bonds. , whether the cost of securities lending is cost-effective, etc. Therefore, the private equity only conducts long-term strategies, and never engages in securities lending and new strategies.
One is the source of securities. According to relevant rules, the restricted shares of strategic investors can only be lent to securities finance companies, which will put such stocks into the securities lending pool for use by unspecified entities. On the first day of listing of new shares, institutional investors competed fiercely for securities sources, and it was very difficult for a single institution to monopolize the securities sources.
It is reported that the declared price in the continuous bidding stage of the Science and Technology Innovation Board must be within 2% of the benchmark price. Anything higher than this range is invalid. This means that quantitative institutions cannot set up high-priced securities lending in advance and can only operate in real time by focusing on the intraday trend. Therefore, the competition for securities lending sources will be fierce.
The second is the cost issue. It is difficult to determine the increase of new shares on the first day of listing, so the interest rates on securities lending will also change accordingly. The person in charge of the new stock affairs of the above-mentioned tens of billions of private equity mentioned that the cost of securities lending will also increase for some stocks that have increased significantly. Under normal circumstances, the annualized interest rate for lending can reach 7% to 30%. For example, Anker Innovation's stock price rose by more than 120% on its first day of listing, and the cost of securities lending subsequently reached 17%.
The third is that under strong supervision, it is difficult to fully realize the increase in the stock price of new stocks by quantitative trading. "Quantification is to keep knocking in and out within a certain range. To a certain extent, the stock price can be driven up through trading volume, but most quantitative strategies do not support unilateral increase." The person in charge of the new stock business of the above-mentioned tens of billions of private equity said , In the process of pulling up, quantitative private equity also needs to face sell orders from the entire market, and even some individual stocks break out on the first day, and the overall risk is difficult to control.
From the perspective of data, the first day of IPO stock lending business accounted for a relatively low proportion of the total turnover, which may have limited impact on stock prices.
According to the statistics of the Securities Times reporter, since the pilot registration system, up to now, a total of 600 new stocks in the Shanghai and Shenzhen markets have reported securities lending transaction data on the first day of listing. The average amount of securities lending sold on the first day was 104 million yuan, and the median was 76 million yuan. The average ratio of the amount sold on the first day of securities lending of related new stocks to its transaction amount on the day was about 8%.
Since 2023, a total of 66 new stocks have been sold by securities lending on the first day of listing, and the first-day securities sales of relevant new stocks have accounted for an average of 7.45% of their transaction value on the day. As of September 8, Zhongke Feitest-U (up 189.62%), which had the largest increase on the first day of listing this year, sold 298 million yuan in securities lending on that day, accounting for 9.91% of the total turnover; the first day of listing The largest decline was in aviation materials stocks (down 19.43%). The amount of securities sold on that day was 116 million yuan, accounting for 6.86% of the total turnover.
Securities lending for new ventures is gradually falling out of favor
The new securities lending strategy was once very popular among quantitative institutions, but as new stock breakouts became more and more common, this strategy has gradually "fallen out of favor".
A research report released by GF Securities in 2021 showed that the new strategy of securities lending could maintain good returns at that time. Analysts from this brokerage have calculated the returns of the current strategy of securities lending and new creation. Taking a Class C account with a scale of 150 million yuan as an example, the rate of return for offline new creation in 2020 will be 12.97%. If we cooperate with securities lending and new creation, the rate of return can reach 20.02%. Taking into account the difficulty of shortlisting quotations during actual participation, the timing of selling new shares, and restrictions on the sale of new shares, the annualized rate of return may only reach 15%, including the cost of securities lending and the transaction amount when selling securities, which are included in cash management income. After costs and incomplete hedging costs, the final income of the C-type account of this plan can reach about 8%, and stable relative income can still be achieved.
"Now that institutional clients use securities lending to create new strategies, it is not as much as before, mainly because it has become very common for new shares to break through." An organization professional from the Shenzhen branch of a large securities firm said that many private equity fund managers would use financing in the past. The issuance of new coupons was used as a method to increase income, but later this method did not contribute too much positive income, and even suffered losses.
According to the statistics of a reporter from the Securities Times, from 2019 to 2020, only one new stock in the Shanghai and Shenzhen stock exchanges broke on the first day of listing. This will increase to 16 in 2021, and as many as 79 in 2022. By 2023, as of September 8, 32 new stocks have fallen below the issue price on the first day of listing.
The statement of the person in charge of the organization has also been recognized by the person in charge of the aforementioned tens of billions of private equity new shares. New strategy for coupon trading.
Interrogating the reasonable allocation mechanism of coupon sources
Although the quantitative arrangement of securities lending and new strategies is not necessarily the main reason for the continuous decline of new stocks, it is undeniable that whoever has sufficient securities sources has mastered richer trading methods. Therefore, it has also triggered another level of concern among market investors - if the securities sources are monopolized by quantitative institutions, is it also an "injustice"? Are securities companies unfair in the process of allocating securities sources? Is there perhaps room for rent-seeking?
The aforementioned quantitative arrangement in the Jiangsu and Zhejiang regions indicated in an interview with a reporter from the Securities Times that considering that the bonds issued by new stock strategic investors are scarce resources, there is room for anyone to profit from this part, and this power is indeed in the hands of a few people. .
A general manager of a branch of a large securities company said that according to the situation of customers, although we scrambled for coupons fiercely, the sources of coupons were mainly given to the quantitative field, and they were concentrated in large-scale private equity.
A person from the capital department of a medium-sized securities firm in Beijing also had similar expressions, but in his view, this is the result of market selection. After all, in the context of limited sources of individual stock securities, the price of securities lending interest rates is market-oriented, and whoever can accept high interest rates can obtain securities. In addition, institutional clients have a large and stable demand for securities sources, so securities companies generally give priority to providing securities lending services to institutional clients.
When talking about how to allocate securities sources, a person from the financing department of another securities firm in Beijing also held the same view, saying that basically "the one with the highest price gets it." As mentioned above, the securities lending interest rate on the first day of listing of new stocks is relatively high, and it is not uncommon for the securities lending cost to be around 20%, and institutional investors are more risk-tolerant in comparison.
A person with long-term experience in financing and financial affairs told the Securities Times reporter that the scarcity of securities sources is currently a hot topic, and it is essentially the result of the lack of financial instruments.
In recent years, different securities companies have built their own "Security Lending Link" system, aiming to expand the size of the securities pool and improve the promotion efficiency of securities lending business. In the future, how to better serve the securities lending needs of different types of investors and how to further improve the transparency of securities source allocation information is worth exploring new ways for securities companies and regulatory agencies to deal with them.