Zhu Bangling: When the financing and securities lending encounters the grading fund, it is also leveraged and leveraged.

Different from previous bull markets, this round of market is accompanied by the gradual maturity of financial derivatives such as stock index futures, margin financing and securities lending, and grading funds, and stock option trading has begun to be piloted. Leveraged participation is a prominent feature of this round of A-share market. The market for leverage and its risk control have not been encountered in the past. Investors and regulators need to be cautious.

Since retail investors account for 80% of A-share trading volume, the speculative culture has been deeply rooted for many years, and the above-mentioned leveraged products are particularly welcome. Once leveraged products such as margin financing and securities lending are lowered, the number of customers will grow rapidly. In the past two weeks, blue-chip elephants such as brokerages have become “pig-sucking pigs” and have even been used as subject matter to make a round of speculation. The market quickly broke through 3,000 points in the short term. The stock market has risen sharply, and this fast-moving market is also in line with the fast-rising characteristics of A-shares. However, when the financing and securities lending encounters a grading fund, the bull market on the current round of leverage is accumulating risks.

As investors accelerate their entry into the market, the scale of margin financing and securities lending has grown rapidly. According to public data, since the beginning of this year, the balance of margin financing and securities lending in the Shanghai and Shenzhen stock markets has reached 847.203 billion yuan, a record high. The financing balance was 840.24 billion yuan, the balance of securities lending was 6.963 billion yuan, and the financing balance accounted for 99.18%. The popularity of margin financing and securities lending has even made some brokerage companies have an urgent need for financing. Some brokers and trading software have been busy for many days in a row, causing a “catch-up” phenomenon and unable to log in and trade.

In addition to the traditional margin financing and securities lending, the umbrella trust has become another booster in the current A-share market. The “two melts” provided by brokers are the best tools for retail investors to add leverage to the market. But for high-net-worth individual customers, they prefer the umbrella trust plan. The clients of Umbrella Trust are mainly natural people, institutional clients and financial companies of some groups. Compared with margin financing products, Umbrella Trust products have the advantage of high leverage and low cost, and the maximum financing leverage can be up to 3 times. At present, the stock of Umbrella Trust in the market is about 150 billion yuan, and its scale has risen rapidly after the arrival of the bull market.

According to reports, the number of customers who have mortgaged real estate loans in the near future has increased significantly. Indeed, some capital curves have entered the stock market. The cost of withdrawing funds from banks is relatively low, but the leverage ratio is limited. Therefore, some radical customers will adopt a leveraged superposition method to transfer the loan funds to the stock market and then open the “two integrations” business.

At present, investors and leveraged stocks are mainly based on margin financing and umbrella trusts. However, many customers financed the purchase of graded funds, which can be said to be leveraged above the leverage, and the risk is magnified by geometric progression. In the bull market, leveraged funds are undoubtedly crazy. Since the beginning of this year, the yield of many leveraged funds in the secondary market has doubled.

The role of the rating fund can be mutually promoted by the capital leverage and the stock bull market. At present, A-shares have a good short-selling strategy for long-term funds. They use a small amount of money to raise all the graded B funds of the heavy industry and form a large premium. At this time, a large number of neutral strategic funds enter the market. This operation is equivalent to the entire market to lend themselves leveraged all neutral funds into the long camp.

Through financing and securities lending to finance with high leverage, and then buying a graded B fund, it can be said that it is an investment strategy that maximizes profits in the bull market. But once the market turns, the huge risks it contains are self-evident.


Recently, China has successively issued a number of laws and regulations on the expansion of financing channels for securities companies. The speed of leverage of securities companies is accelerating, and the innovation business of securities companies is in full swing. New investment banks are becoming a reality. The leveraged products issued by the brokerages have promoted the market's skyrocketing market, and the active market has also brought lucrative income to brokers. At the same time, with the booming margin financing and securities lending business, the threshold for investors to enter the market is decreasing. The number of retail investors in the “two-in-one” business has soared, and more than 90% of customers have habitually financed with a bullish strategy. It can also be seen from this point that the margin financing and securities lending business is not mature in practice, and most investors only regard it as a tool for “borrowing money” stocks.

Industry experts compare the domestic market with mature market conditions. Currently, domestic margin financing and securities trading accounts for 18%, and mature foreign capital markets are stable at 20% to 25%, which is within the normal range. However, financial leveraged products need to consider the reality that China's capital market accounts for the majority of retail investors, speculative culture is prevalent, and investor education is not in place. In the hot market and brokerage innovation, the management of leveraged products is increased, especially with leveraged financing. Buying leveraged funds to avoid large leverage on leverage. After all, the 2008 financial crisis marked by high leverage is not far off.

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