Why Do Bank Stocks Soared After Asymmetric Interest Rate Cuts?

After the central bank announced asymmetric interest rate cuts last weekend, the market generally believed that the move had a significant negative impact on the banking sector, who knows that bank stocks rose this week.

On Friday, 16 listed banks had 6 trading restrictions (Everbright, Bank of communications, CITIC, Huaxia, Ningbo, Ping An), the lowest rise of the ICBC also reached 5.48%, which is unique in the history of A shares.

Among them, Everbright Bank increased by 29.69% a week, and weekly gains of more than 20% were Nanjing (23.06%), bank (20.54%), Ningbo (20.44%), CITIC (20.04%) and so on.

Since asymmetric interest rates will narrow the interest rate of banks, which is not conducive to the growth of performance, why banks' stocks will not rise or fall, and the Shanghai Composite Index will rise by 7.88% this week?

The author believes that the main reasons are:

First, the preferred stock starts.

This week, almost every day there was news of preferred stock.

First, ICBC announced that the SFC approved the issuance of 350 million shares (35 billion yuan) in preferred stock abroad (Hongkong market). Then, ABC said its 400 million shares (40 billion yuan) preferred shares were pferred on the SSE comprehensive business platform in November 28th. Almost the same time, Pudong Development Bank approved the issuance of 300 million shares (30 billion yuan) preferred shares, issuing 150 million shares for the first time, and the Industrial Bank approved the issue of 260 million shares (26 billion yuan) preferred shares, issuing the 130 million shares for the first time.

In late October, the Bank of China (CB) had already issued a 6 billion 500 million dollar (RMB 40 billion yuan) preferred stock overseas (Hongkong market) and recorded an oversubscription of $21 billion 800 million.

According to statistics, since April this year, a total of 15 listed companies have issued (Implementation) preferred stock schemes, and the total amount of funds raised will be 452 billion 900 million (including domestic and foreign), of which 9 banks will be invested and 395 billion will be raised.

There is no doubt that the issuance of preferred shares has greatly alleviated the financing pressure of listed banks.

Think about it, nearly 400 billion of the fund-raising, and one year, the bank capital gap is at least 1-2 billion, plus bond and other two tier capital, the threat of large scale money encircled by banks for several years has basically been eliminated.

At the same time, the issuance of preferred stock is really low cost financing.

Taking agricultural bank as an example, the dividend yield of preferred stock is only 6%, lower than the common stock dividend rate (7.08%), and people do not have the right to vote. According to the "preferred stock pilot management measures", the dividend yield is "not higher than the weighted average return on net assets of the most recent two fiscal years" (ABC 20.8% in the past two years).

Based on this calculation, the issuance of preferred shares not only enriched capital, increased capital adequacy ratio, but also increased the net asset yield by 1-2 percentage points.

Of course, the issuance of preferred shares has also enriched the investment goods in the capital market. When interest rates are down, 6% of the dividend yield is still very strong.

For example, preference shares are very appetites for pensions, social security funds and insurance funds.

Second, speed up asset securitization.

Last week, the securities and Futures Commission issued the management regulations and supporting rules of asset securitization business.

"Clearly, we will accelerate the introduction of large class basic assets and credit assets securitization products.

As we all know, since the two housing asset securitization led to the financial crisis in the United States, China's asset securitization has been very slow progress, especially in the exchange market, almost no credit assets securitization products, so far, the Shanghai Stock Exchange only total 2 billion 631 million Yuan Ping An Bank 1 small consumer loan asset backed securities, Shenzhen Stock Exchange has only 5 billion yuan of Ali small loan asset securitization products.

At present

When the inflow is significantly reduced, the speed up of asset securitization will obviously help to increase the liquidity of banks.

Third, foreign investors will be open to the domestic market directly.

A few days ago, Liu Xinhua, vice chairman of the securities and Futures Commission, said at the annual meeting of Finance and economics that based on the pilot and smooth operation of the Shanghai and Hong Kong links, we will continue to raise the level of opening up of the capital market, expand the scope of qualified foreign investors, and steadily open up overseas investors to invest directly in the domestic market, and orderly promote domestic investors to invest directly in overseas capital markets.

Everyone knows that bank shares are the favorite of foreign investors.

Finally, all said

Narrowing the spread of banks may not be the case.

According to data provided by Hu Xiaodong, vice president of the central bank, the latest loan base interest rate (LPR) in November 27th was 5.52%, which means that the best loan interest rate obtained by the best quality enterprises from banks is almost the same as the benchmark interest rate (5.6%).

In fact, the loan interest rate that enterprises get is 7-8% or even higher. With the current interest rate of 3% fixed by the big businesses such as workers and peasants, and the 7-8% loan, the interest rate will not be reduced.

In order not to stall the economy next year, the NDRC is constantly upgrading projects. Only railways, airports and other infrastructure projects reach trillions. Banks are still sitting in the south. Their money is pretty good.