On Thursday night, there was a piece of news that came out too late, so I didn't include it in my evening report. Guotai Junan Securities was planning to absorb and merge Haitong Securities. This was the first merger of large securities firms after the release of the Nine Measures. Guotai Junan Securities and Haitong Securities were both suspended on Friday. Other securities sectors that were trading once surged to 2.5% in the morning, but fell to 0.5% at the close, which was equivalent to leaving some people out in the cold.
Traditionally, there are two types of positive factors for securities stocks. One is the reduction of stamp duty, which is unquestionably a once-in-a-decade event. The other is the merger of securities firms, which is a tradition and occurs almost every one or two years.
Why is the merger a good thing? Because there are too many brokerage firms. There are more than 140 A-share licensed brokerage firms, and the services are highly homogenized. When I first opened an account to trade stocks (in 2007), the transaction commission was 0.3%. Later, when the market was not good, they competed to attract customers, and the commission was reduced to 0.1%, 0.05%, and 0.03%. The latest has been reduced to 0.01-0.015%. Some even offer free five yuan, that is, cancel the minimum limit of 5 yuan.
In less than 20 years, the commission has dropped by 96%. You can imagine how fierce the competition is. In order to meet their KPIs, many grassroots account managers secretly obtain internal customer information of the company and even call to poach colleagues. Don’t ask me how I know this. When I worked with securities companies before, I was poached by them.
So, some people in the industry have been calling for brokerage mergers to reduce internal competition in the industry. However, it is not easy for two companies to merge, and it is not like CNR and CSR, which will become the only one in the industry after the merger. If all 140 brokerages pass the round, there will still be 70 left, and the competition will still be fierce.
So you have to understand that this is just a hype topic, and it is difficult to provide significant help to operating performance. Shenyin Wanguo is Shenyin Securities first merged with Wanguo Securities, and then merged with Hongyuan Securities. The mergers are still a mess.
However, the merger between Guojun and Haitong is still worth paying attention to. After all, this is the merger of the sixth and ninth in the industry (market capitalization). The influence is significantly different. As long as the overall market environment is better when Haitong and Guojun resume trading, it is possible. Take the opportunity to start a fire. If it is still as dead as it is now, then forget about it, there will be no benefit for the Shenxiong, it will only open high and go low.
The company announced that the suspension is not expected to last more than 25 days.
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1. The United States has released a new round of employment data. I won’t copy and paste the long list of numbers. I will just say that the conclusion is not ideal. Various figures are lower than expected, so the expectation of interest rate cuts continues to rise. Now few people doubt that there will be a rate cut on September 18. More people are discussing whether it will be a 25 basis point or a 50 basis point cut. A betting website that I usually use as a reference has a pool of 17 million US dollars for the Federal Reserve’s September 18 meeting. The probabilities are as follows. These are not expert predictions, but real money bets. The reason why the probabilities add up to more than 100% is because of the rounding display bug.
2. WeChat iOS system has been updated to version 8.0.51, fixing some known issues. The reason for mentioning this is that there has been a rumor that WeChat and Apple have a conflict over the commission of consumption, and WeChat may not support the next generation of Apple phones. There has been a lot of noise on the Internet about the "Apple WeChat 2-choice" issue. Now WeChat has made a system upgrade, which can be regarded as a way to dispel the rumor.
3. Vanke's sales in August amounted to 17.2 billion yuan, and the cumulative sales from January to August amounted to 163.7 billion yuan. At the beginning of the year, I saw that the institutions predicted that the annual sales would be 240 billion yuan. The calculation based on the proportion is not far off, and the estimate is quite accurate. At the same time, the conclusion of the institutions is that the annual sales of 240 billion yuan will not help Vanke get out of trouble, and the financial pressure will increase over time. I am just paraphrasing.
Poly's sales in the first eight months were 36.8 billion, down 13.6% year-on-year. Poly is now recognized as the safest real estate company because their previous business strategy was relatively conservative. Vanke, which was the first to shout out the slogan "survive", may have just wanted to scare its peers, and even they themselves did not believe it.
4. Recently, there is a major industry event. A few days ago, the CSI A500 index was newly launched. The regulatory authorities immediately approved the corresponding ETF plan. Note that 10 companies were approved at once. I inquired and found that the scale requirement for each company is 2 billion. This means that 20 billion funds will soon be used to increase holdings of the constituent stocks of the CSI A500.
I was thinking at the time, these 10 fund companies are really brave to apply. It is really difficult to sell 20 billion funds in this market. I guess they can only find institutional funds from securities companies and insurance companies to help them out and fill the gap. It is impossible to sell 20 billion on the C-end. The fund investors are now redeeming 20 billion every week.
5. Many media outlets reported on the 40% price drop of Hong Kong luxury homes over the weekend. I checked and it was a villa in Sheung Shui Tian Luan, which was bought for 24 million 14 years ago and is now sold for 17 million. But how can a villa worth 17 million be considered a luxury home in Hong Kong? Do you remember the 4-fold theory I mentioned before? 17 million divided by 4 is a villa worth about 4 million. I guess it is most likely in the north of Hong Kong, near Shenzhen, because only there are the cheapest houses, equivalent to the cheap villas built in Miyun District, Beijing.
The only thing that this news is not wrong about is that Hong Kong housing prices are indeed falling. I will post a chart from 1994 to 2024. The trend of Hong Kong housing prices is almost the same as that of the mainland, which also peaked in 2021 and has now fallen to 2016. 20-30% of Hong Kong real estate buyers are from the mainland.
The above was all written in the afternoon. I went out drinking in the evening, and fell asleep directly in the massage chair when I got home. It was my mom who woke me up to come on duty. I feel dizzy, so please forgive me.
