Official opening next week!The Beijing Stock Exchange welcomed the flow of funds, 13 brokerages entered the market with incremental funds, and 36 individual stocks were selected by the first batch of market-making providers Cailian Press

News from the Financial Associated Press, February 18 (Reporter Lin Jian)After the launch of the Liangrong business a week ago, the Beijing Stock Exchange is also ready for the market, and the gate will open on Monday!

A reporter from the Financial Associated Press noticed that according to the latest news from the official website of the Beijing Stock Exchange, the long-prepared market-making system of the Beijing Stock Exchange will be officially launched on February 20. 13 securities firms, including Galaxy Securities, Guotai Junan, Industrial Securities, China Securities, Shenwan Hongyuan, Guosen Securities, Caitong Securities, Huatai Securities, and China Merchants Securities, participated in the stock market-making transactions of the Beijing Stock Exchange, involving a total of 36 underlying stocks in the market-making. 22 is the 50 constituent stocks of the Beijing Stock Exchange, accounting for 58.77%.

The picture shows a list of the first batch of market makers on the Beijing Stock Exchange. From the perspective of market makers, Sinolink Securities provided the most market-making services, reaching 22, followed by CITIC Securities (6), Essence Securities (5 only), Soochow Securities (4), Guotai Junan (3), Galaxy Securities (3), Caitong Securities (2), Guosen Securities (2), Shenwan Hongyuan (2), Industrial Securities (2 only), China Securities (2), Huatai Securities (1), China Merchants Securities (1), etc.

From the perspective of market-making bids, BTR has obtained 7 market makers to provide market-making services at the same time, which is the most “sought after” among the market-making bids, followed by Jilin Carbon Valley, which provides services from 4 market makers. In addition, targets such as Airong Software, Silane Technology, Haixi Communications, Huayuanhai, Yoshioka Precision, Jiaxian, Junchuang Technology, Longzhu Technology, Shibibai and Changhong Energy also obtained two market makers at the same time. Provide market-making services.

The picture shows the list of the first batch of market-making bids made by the North Exchange. There are two securities firms that will soon participate in market-making, including Zheshang Securities and Orient Securities. They are expected to start the market-making business of the North Exchange in the second quarter of this year. From this point of view, with the further development of CBEX’s market-making business and the further expansion of target coverage, the operation quality of the CBEX’s secondary market will continue to improve in the future.

According to what the reporter learned from the CBEX, in the next step, the CBEX will continue to improve various supporting systems and mechanisms, strengthen the supervision and management of market makers and the prevention of transaction risks, promote the benign interaction between the CBEX and the NEEQ market-making business, and improve market valuations. Value pricing function to better serve the high-quality development of innovative SMEs.

The first is to actively promote the expansion of the qualifications of market makers on the North Exchange.Considering that the companies listed on the CBEX are currently sourced from the NEEQ market, in order to improve the implementation effect of the CBEX’s market-making business and promote the benign interaction between the NEEQ and the CBEX’s market-making business, the CBEX will, on the premise of ensuring that risks are controllable, Next, actively promote the expansion of the scope of market makers on the Beijing Stock Exchange, and try to include more NEEQ market makers with certain market making experience, market making performance and high risk control level.

The second is to improve the market-making system of securities lending.Allowing market makers to carry out market-making business by borrowing securities from shareholders of listed companies will help reduce the inventory management risks of market makers, enrich market-making trading strategies of market makers, and thus increase the enthusiasm of market makers to participate and further exert the institutional effect .

There are three major characteristics of the standards for securities companies to choose market-making bids

Why did the 13 brokerages choose these 36 targets to provide market-making services? The reporter learned from the brokerages that there are three main screening criteria: one is to target high-quality leading stocks with high liquidity and high market recognition. Under the premise of exploring the market-making strategy of the Beijing Stock Exchange; second, securities firms use the synergistic effect of sponsorship business and market-making business to make markets for their own sponsor stocks; third, some securities firms continue to provide services for the previous NEEQ market-making stocks.

Focusing on these three standards, there are examples to verify. On the one hand, there are many market makers for Betray and Jilin Carbon Valley, which are the heavyweights of the Beijing Stock Exchange 50 Index. Focusing on the second standard, China Securities Investment Co., Ltd. makes markets for its own sponsor projects Runnong and Water Saving, and AVIC TEDA. Essence Securities made the market for Hengjin Induction, and Guotai Junan made the market for Huayuanhai; involving standard three, Sinolink Securities made the market for Longzhu Technology, Chunguang Pharmaceutical, and Sanxiang Technology.

According to the system rules and business supporting guidelines issued by Beijing, the implementation scope of CBEX’s mixed trading covers all listed companies’ stocks on CBEX, and qualified market makers can choose market-making targets by themselves. At the same time, CBEX encourages sponsor institutions with market-making qualifications to make markets for relevant stocks during the continuous supervision period.

The average increase in net profit of market-making targets reached 18.82%

The picture shows the market-making time officially announced by the CBEX. According to the relevant person in charge of the CBEX, the 36 bids showed four major characteristics, which are also important reference factors for market makers to choose bids.

First, the overall corporate development has shown strong resilience.

According to the above-mentioned person in charge, in recent years, affected by multiple factors such as the impact of the epidemic, the tense international situation, and rising commodity prices, companies generally face various pressures such as rising costs and weak demand. The overall performance maintained steady growth, with an average increase of 23.19% in overall operating income and an average increase of 18.82% in net profit, showing strong resilience and vitality.

Second, the characteristics of enterprise innovation are very distinct.

The reporter noticed that among the first batch of market-making bids, 19 companies were recognized by the Ministry of Industry and Information Technology as specialized, special-new “little giant” companies, and “specialized, special-new” companies accounted for 52.78%, and the average R&D intensity in 2021 reached 8.40%. , Northland, Chuangyuan Xinke’s R & D intensity exceeds 20%, and five companies including Changhong Energy have R & D expenditures of more than 100 million yuan.

The above-mentioned person in charge mentioned that the innovation capabilities of the first batch of market-making bid enterprises are relatively outstanding.

The third is to reflect the characteristics of self-reliance and self-improvement of science and technology.

It is understood that the production technology of some listed companies has reached the international advanced level, and key products have achieved import substitution.

Fourth, the prosperity of the industry in which the underlying stock belongs continues to be high.

The relevant person in charge of the Beijing Stock Exchange introduced and explained the two stocks of Junchuang Technology and Jilin Carbon Valley. With the improvement of the prosperity of the new energy industry, Junchuang Technology, the target stock for the production of supporting new energy auto parts, will increase its revenue by 77.68% in the first three quarters of 2022, and its net profit will increase by 222.17%. The business cycle of upstream industries such as materials continues. The underlying stock Jilin Carbon Valley actively expands production by increasing investment in research and development of carbon fiber materials, and its net profit in the first three quarters of 2022 will increase by 170.10%.

The fifth is to basically cover leading companies.

The reporter noticed that leading companies of the Beijing Stock Exchange, such as Betray, the leader in lithium battery anodes, Jilin Carbon Valley, the leader in carbon fiber precursors, and Yingtai Bio, the leader in domestic pesticides, have all entered the list of the first batch of market bids. The average market value of the first batch of market-making target stocks was 3.818 billion yuan, much higher than the average market value of companies listed on the Beijing Stock Exchange of 1.44 billion yuan.

Promote market liquidity and reduce investment transaction costs

What are the real impacts of the CBEX’s market-making system? This has become the focus of current investors, listed companies and even the market.

According to the detailed rules, the market-making system of the Beijing Stock Exchange and the market-making system of the Science and Technology Innovation Board, which is already in operation, are both mixed trading systems that implement parallel bidding and market-making in a single securities transaction. At present, this kind of mixed trading is a common practice in overseas mature markets including the New York Stock Exchange and Nasdaq, as well as some emerging markets.

Specifically, this type of market-making system can continuously provide two-way quotations to the market through market makers, which not only maintains the advantages of fast discovery of continuous bidding transaction prices and strong transaction timeliness, but also allows market makers to trade within a small price range. A certain number of continuous quotations within a certain period can achieve the effect of further narrowing the bid-ask spread, increasing market depth, and calming market fluctuations. At the same time, market maker quotations also help to narrow the market bid-ask spread and reduce investor transaction costs.

Talking about the impact of the opening of the market-making system of the Beijing Stock Exchange, the reporter noticed that the Science and Technology Innovation Board, which just implemented the market-making system last year, can be used as a reference. Taking the operation of the market-making business on the Science and Technology Innovation Board in the first month as an example, the average daily turnover and average daily turnover rate of the market-making target stocks have increased compared with those before the business was launched, while the intraday volatility has dropped significantly.

Therefore, it can be expected that after the CBEX’s stock market-making trading business is launched, it will play a positive role in increasing the depth of market orders, improving market liquidity and market stability.

The person in charge of the market-making business of Essence Securities told reporters that the stock market-making business of the CBEX has a major impact on the stability and development of the CBEX market. The introduction of the market maker system will help to enhance the market liquidity of the CBEX, narrow the bid-ask spread, effectively improve the transaction efficiency of the secondary market, reduce the transaction costs of investors, and further stimulate market vitality. At the same time, market makers will give full play to their professional pricing capabilities, promote the matching of stock prices with the intrinsic value of enterprises, and smooth the large fluctuations in stock prices, which is conducive to the improvement of market stability and lays a solid foundation for the high-quality expansion and development of CBEX.

The person in charge of the CBEX further mentioned that the launch of the stock market-making transaction business on the CBEX can further tap the value of the underlying stocks for market making and improve market liquidity by giving play to the role of securities companies as professional institutional investors in valuation and pricing. Drive the discovery of the overall value of the market, enhance investors’ confidence in investing in stocks listed on the Beijing Stock Exchange, guide more social funds to invest in high-quality small and medium-sized enterprises, and help small and medium-sized enterprises innovate and develop.

It helps market-making brokerages leverage and update their business growth points

As market-making service providers, market-making securities firms will also usher in more abundant profit growth points, especially the precedent of market-making on the Science and Technology Innovation Board.

Some brokerages told reporters that the Beijing Stock Exchange will bring more opportunities for brokerages to invest in investment banks. Top brokerages have advantages in capital strength, securities source reserves, compliance and risk control capabilities, which will help improve customer service sticky. At the same time, it can also promote the transformation of self-operated business to market-making transactions for customer service, which is conducive to improving the stability of the performance of securities companies.

Zheng Pingde, head of the market-making and trading department of Sinolink Securities, said that for securities companies, the market-making and trading business of the Beijing Stock Exchange, as a market-making business with development prospects, not only enriches the types of market-making business of securities companies, but also provides new profits. The growth point can also enhance the comprehensive financial service capabilities of securities companies.

He further mentioned that the development of the CBEX market-making transaction business can also have a positive synergistic effect on the CBEX underwriting sponsorship business, refinancing business, and CBEX transfer business of securities firms. By providing sponsorship underwriting, research pricing, A series of comprehensive services such as market-making transactions further enhance the customer stickiness of CBEX and enhance the company’s comprehensive brand competitiveness.

In addition, he also believes that by providing market-making services for companies listed on the Beijing Stock Exchange, brokerages can deepen their cooperation with companies listed on the stock transfer system in the early stage, and form a coordinated layout with the listing business and market-making business of the stock transfer system to improve the efficiency of brokerage capital use .

The person in charge of the market-making business of Galaxy Securities told the reporter that carrying out the market-making business will help securities companies expand their business scope and enhance their core competitiveness. Lay a good foundation for development, further enhance core competitiveness, and better serve the national strategy, the real economy, and small, medium and micro enterprises with financial services.

The market-making department of CITIC Securities stated that for securities companies, the market-making of the Beijing Stock Exchange has brought new business models and profit growth points. The investment banking, investment, market-making, brokerage, and sales transactions of securities companies in the Beijing Stock Exchange market have become one. A complete closed loop can provide enterprises with full-chain capital market services. More importantly, the launch of the securities lending business of the Beijing Stock Exchange makes it possible to make future securities lending markets. Securities firms can develop various trading strategies on the basis of securities lending, improve the overall trading capabilities of securities companies, and create a platform for securities companies to operate their own businesses. core competitiveness.

Qualified NEEQ market makers are expected to join in the future

According to relevant regulations, securities companies need to apply to the China Securities Regulatory Commission for market-making qualifications and obtain approval before they can further apply for the authorization of the Beijing Stock Exchange to provide market-making services for specific stocks. Brokers who are qualified but have not yet formally opened their businesses are eligible to apply for the market-making business of CBEX. But on the whole, the market makers of the New Third Board, which are inseparable from the Beijing Stock Exchange, cannot conduct business on the Beijing Stock Exchange. In fact, there are some differences between the market-making system of the Beijing Stock Exchange and the NEEQ market-making system, but the Financial Associated Press has reported many times before that market makers on the NEEQ are also calling for joining the market-making lineup of the Beijing Exchange.

According to the reporter’s latest information, considering that the listed companies on the CBEX are currently sourced from the NEEQ market, in order to improve the implementation effect of the CBEX’s market-making business and promote the benign interaction between the NEEQ and the CBEX’s market-making business, the CBEX is ensuring risk Under the premise of controllability, actively promote the expansion of the scope of market makers on the Beijing Stock Exchange, and try to include as many new third-board market makers with certain market-making experience, market-making performance and high level of risk control.

The first batch of securities firms are actively preparing and revealing the latest plan

The market-making business of the Beijing Stock Exchange can be expected. In this regard, the securities firms that are about to open their businesses also have clear plans.

CITIC Securities stated that the company has always attached importance to investment and support for innovative businesses, and has accumulated rich experience in ETF market making, option market making, science and technology innovation board market making, new third board market making and other businesses. The market-making of the Beijing Stock Exchange will be steadily promoted in accordance with the steps of pilot first and then promotion. In the initial stage, some pilot stocks will be selected for market-making and quotation trials, and the market-making strategy will be optimized and perfected. In the future, the number of market-making will be gradually increased and fully rolled out. After the market-making of securities lending is launched in the later stage, more flexible and diverse market-making strategies will be developed to further expand the scale of market-making.

It is understood that after the business development enters a stable period, Sinolink Securities will further expand and enrich the selection range of market-making targets through the combination of its own funds and securities lending according to the market development and business development of the Beijing Stock Exchange. In terms of selection of market-making targets, we will focus on specialized and new companies, focus on low-liquidity stocks, and strive to improve the liquidity of stocks with poor liquidity.

“Strive to simultaneously improve the quantity and quality of market-making, and strive to become one of the top market makers in the market-making team of the Beijing Stock Exchange.” Zheng Pingde said.

The person in charge of the market-making business of Essence Securities said that the company will take this opportunity to give full play to the market-making advantages of the New Third Board, actively play the role of liquidity provision and value discovery in the Beijing Stock Exchange market, and earnestly implement the company’s “14th Five-Year Plan” The development plan further expands the business layout, gathers business resources, strengthens the linkage between market-making business and investment banking business, fulfills the responsibility of state-owned financial enterprises, further enhances the company’s comprehensive influence in the industry, and empowers the high-quality development of small and medium-sized enterprises.

The person in charge of the market-making business of Galaxy Securities told reporters that by continuing to participate in the market-making business of the Beijing Stock Exchange, the strategic trading capabilities and service capabilities of the market-making business will be improved, and the quality of market-making transactions will be improved, so as to serve the long-term development of small and medium-sized innovative enterprises in the country. Serving the needs of small and medium-sized investors and the multi-level reform and development of the capital market.

Regarding Guotai Junan Securities, the reporter learned that the brokerage attaches great importance to the market-making business, and has done a lot of work in information system construction, organizational system improvement, and personnel training to prepare for the launch of this new business. Facing the future, we must first start steadily to ensure transaction security and orderly quotations. Secondly, it is necessary to strengthen the construction of its own system, risk control, transaction and other aspects, and gradually improve and improve various quotation strategies. Finally, on this basis, Guotai Junan’s own characteristic business will be formed. Further expand the business scale, and continue to contribute to the improvement of market liquidity and the stability of the quotation system.