Net Value "Dystocia", Redemption High Pressure: Public Offering Overtime To Deal With Post Market Quotations

The A share market, which opened in the new pneumonia outbreak of coronavirus, has brought more challenges to the public offering industry.

In twenty-first Century, the economic report reporter learned from many parties that in February 3rd, when the A share market appeared to be in an extreme market of large scale stock falls and large index volatility, many operators of many public offering agencies worked overtime all night on the first day of the market, and the net value of individual public offerings was even caught in the "difficult labor" situation.

According to industry sources, the arrangements for the rest of the Spring Festival holiday, which resulted in lack of manpower, temporary adjustment of the opening date and the redemption pressure caused by the emergence of extreme market, brought unprecedented challenges to data proofreading and net value accounting of the public offering product operation. Reporters learned that the TA registration of some public offering agencies did not start until the early morning of February 4th.

In addition, the public offering product redemption caused by the shock market has brought pressure to the liquidity management of public offering products, and many large public offering agencies such as Xingquan, Yi Fangda, huitianfu and so on have announced their own or senior executives' funds to subscribe for their own equity products. In many efforts, the three major stock indexes in the A share market rebounded in February 4th, and the liquidity and operational pressure of the public offering products also eased to a certain extent.

Overnight operation

In February 3rd, after the A shares closed, almost all the public sector operators worked overtime until the middle of the night.

"It's just as busy as a stressful medical resource to deal with the epidemic. The operation resources are not enough at this time. We have to deal with a lot of data and details, but the personnel resources are not as good as usual. We work overtime very late, and some fund companies go directly to the middle of the night." Wu Tong, a head of operations of a public offering agency in Beijing, has admitted.

"Mainly because the manpower is not enough, and some custodian staff are not in place." An operator of a public offering agency in Shanghai said, "the situation of each institution is different. Sometimes people can't find people. Some organizations are not on duty. A person can't attend to a few people's work."

According to Wu Tong, the reasons for this phenomenon come from many aspects. First, after the A share market opened, some of the fund products had a certain scale redemption. The two is the adjustment of the opening date, resulting in the re checking of interest and other minor data, resulting in a sharp rise in the volume of related business operations. The three is that many company operators are telecommuting at home, and the staffing of the custodian is not saturated. There is a delay in communication and docking.

"If there is a commission to check the problem, it will take more than an hour." Wu Tong said frankly.

Another reporter was informed that some public institutions in order to cope with the outbreak and reduce the flow of personnel, the operation of personnel to open remote home office mode of work, and most of the custodian banks still require work in the office.

"In order to cope with the epidemic, most fund companies work at home, because in order to reduce the risk of outdoors and reduce the risk of epidemic, some small fund companies may have to work overtime in the office if they are conservative in style or weak in IT capability." Wu Tong said, "trusteeship banks basically work in offices because most of them are intranets for security purposes, but not all personnel are on duty. Some banks are partly on duty and partly at home."

It is precisely because of the accumulation of the above factors that the efficiency of data reconciliation is insufficient, but there are still some phenomena that the net value of some public offerings is difficult to produce.

"Last night, there was data that could not be linked to the docking of the custodian bank. Many public fundraising offices worked overtime all night, and some TA registrations did not start until five or six a.m. on the second day." Wu Tong said, "compared with usual, the net value of many products has been waiting for second days before it comes out."

"The situation is also very special this day, mainly due to several factors superimposed together, and after the end of the first day of the holiday, many agencies are too late to prepare for the connection with the trustee bank and the plan is not ready." Wu Tong said.

Facing redemption pressure

In addition to the huge workload of the operation sector, another challenge faced by the public offering agencies comes from liquidity risks caused by the redemption.

"There are more than 3000 stocks on February 3rd closing down, if the second day continues to limit, then the fund managers' Redemption operation space is very limited, can only deal with no limit of the target, which will induce market sentiment further panic." A fund manager of a public offering institution in East China said.

In order to respond to emergencies, many public offerings announced that their products were self subscribed. Including Xingquan, Tian Hong, Yi Fangda, huitianfu, Huaan and other institutions to subscribe for their own equity products, some companies include senior executives.

Under various efforts, the liquidity alerts in the A share market and public offering products have been initially released. In February 4th, the three major indexes of A shares rose in early trading and continued to rise in the afternoon. As of the close of the day, the stock index rose by 1.34%, while the growth of gem and small and medium sized boards rose by 4.84% and 3.67% respectively.

"The regulation of the whole industry's equity redemption scale is mastered. The overall scale is not small. It can be said that the industry has suffered a certain amount of liquidity pressure." A public close to the foundation said that "at this critical moment, the public offering industry has assumed some responsibility for subscriptions."

"With the stock index turning red, it shows that the confidence of the market is being restored, and the short-term trend needs to pay close attention to the change and trend of the epidemic, but the long-term trend is not going to be affected." A fund manager of a public offering institution in Beijing hints.