Investment strategy of securities industry in January 2024: reducing reserve ratio highlights the elasticity of non bank BETA
Liquidity continues to be loose, the valuation is at the bottom, and the risk exposure is small, so we can bet on the flexibility of securities companies' stocks under the reduction of reserve ratio.
Since January, the market share has been weak and the debt has been strong, and the incremental capital mainly insurance capital has continued to flow to long-term interest rate debt and high dividend equity assets. On January 24, the central bank announced a 0.5 percentage point reduction in the reserve ratio, which exceeded market expectations. The credit and monetary easing environment was conducive to stabilizing the price of risky assets; At the same time, Wang Jianjun, vice chairman of the CSRC, said in an interview with the Securities Times that "the stock market has become an important channel for residents to allocate assets, and market fluctuations are directly related to the people's' pockets'." This reflects the concern of the regulators about the capital market, which will promote the entry of long-term incremental funds, including insurance funds, into the market. The current valuation of securities firms' assets is at the bottom, and the net risk exposure brought by "snowball" derivatives and stock pledge is controllable. The subsequent valuation has certain repair opportunities.
Comments on industry performance: the trading volume fell month on month, and the "seesaw" of stocks and bonds was significant.
(1) In terms of brokerage business, the daily average turnover of A-shares in December was 782.8 billion yuan, down 11.50% month on month and 0.18% year on year. (2) In terms of investment banking business, the number of IPOs in December was 21, and the scale of raised funds was 15 billion yuan, up 59.00% month on month; The refinancing scale in December was 47.5 billion yuan, up 22.30% month on month; The underwriting scale of corporate bonds and corporate bonds in December was 281.4 billion yuan, down 18.18% month on month.
(3) In terms of proprietary business, the "seesaw effect" of stocks and bonds continued in December. The Shanghai Composite Index fell 1.84%, the CSI 300 Index fell 1.86%, the GEM Index fell 1.62%, and the China Securities All Bond Index rose 0.88%.
(4) From the balance of the two financing funds reflecting market risk appetite and activity, the average balance of the two financing funds in December was 1665.5 billion yuan, up 0.37% month on month, continuing the month on month upward trend in November.
Investment advice
At present, the valuation of the securities firm PB is 1.18 times, which is 0.49% of the historical quantile in the past decade. The margin of safety is sufficient. We maintain an "over allocation" rating for the industry. On January 16, General Secretary Xi Jinping delivered an important speech at the opening ceremony of the seminar on promoting high-quality financial development for leading cadres at the provincial and ministerial levels, stressing that the key core financial elements of a financial power are a strong currency, a strong central bank, a strong financial institution, a strong international financial center, a strong financial supervision and a strong team of financial talents. It is suggested to focus on high-quality securities companies with strong capital strength and strong institutional business, recommend Industrial Securities with increased collaboration with shareholders and strong business collaboration expectation, and there is Oriental Securities with reverse expectation at the bottom.
Risk warning
The economic recovery is not as expected; Market competition intensifies; The promotion of innovation was not as expected.
