Trial Implementation Of Registration System On Growth Enterprise Market

With the implementation of the registration system reform of gem, the buyer's organization is seizing more strategic opportunities.

According to wind data collected by 21st century economic reporter, a total of 279 new shares have been issued or confirmed in the main board, growth enterprise market, science and technology innovation board and selected layer, which has more than doubled compared with the same period last year.

The new share supply opportunities brought about by the registration system reform and the premium effect at the initial stage of IPO are coveted by many buyer institutions. The reporter learned that at present, there are two main types of new strategies in the market: one is to allocate low volatility bottom position + strike new strategy, that is, to hold some target with low fluctuation value as the bottom position; the other is to hedge the bottom position risk by using stock index futures, securities lending and other means, so as to retain the stable income of the new strategy.

However, some analysts pointed out that the effectiveness of the above strategies is based on two assumptions: one is that new shares can be continuously supplied; the other is that new shares will still be popular at a premium without breaking. Therefore, investors should be vigilant against the corresponding risks when adopting similar strategies.

Make new waves

The premium effect of IPO is still coveted by many buyers.

For example, on August 24, the new shares registered on the growth enterprise market (GEM) ushered in a rapid rise on the first day.

Trading data show that, after the reform of the registration system on the gem, 18 new shares were on the rise. Among them, n-card billion led the rise 20 minutes after the opening, with an increase of 527.94%; at that time, there were no less than 6 gem registered new stocks, with an increase of more than 100%, and 18 new shares increased by more than 40%.

In the face of the high premium continuously created by new shares, it has become a cost-effective and stable thing for the buyer's organization to strike new shares.

"Based on our calculation, assuming that there are no big policy changes such as IPO suspension, the overall return on new shares will remain between 7% and 10% annualized." An investment manager of a private equity firm in South China pointed out that "in other words, there is actually a fixed income in it."

"As the number of new shares continues to increase, although the winning rate of new shares is relatively low, the overall probability of hitting new stocks still exists, so this also leads to the phenomenon that more funds are invested in the new strategy." According to the head of a Beijing private equity research firm.

Due to the need for a certain proportion of the market value of the position as the bottom position, a certain structural arrangement should be adopted in the strategy of new trading.

One of the methods is to take some undervalued, low volatility blue chip stocks as the bottom position, and seek new fixed income.

"One way is to allocate the position mainly to undervalued and low volatility blue chip stocks, which will not rise sharply but will not fall sharply. As a new bottom warehouse configuration is more suitable. " The investment manager said.

"In fact, there was a round of this strategy in 2017, when Liu Shiyu was in power, the issuing speed of new shares was relatively fast, so the new strategy at that time was also very effective, and the rise of blue chips at that time was also related to this." The above investment manager pointed out.

The second method is to use stock index futures, securities lending, over-the-counter options and other instruments to hedge the bottom positions held, and only retain the new part of the income.

"For some institutions with lower risk preference, they will choose to use some financial instruments to offset their bottom positions, which is a pure new product, but the risk return is lower than the strategy of underpricing." The above investment manager said, "some products will also cooperate with the Pb Department of the securities companies to obtain some securities sources or other tools, which is more conducive to the implementation of the strategy."

According to the reporter learned, there are also some private institutions are willing to adopt the combination of steady growth and innovation.

"In this round of bull market, undervalued strategy has gradually failed. On the contrary, growth stocks are more recognized by the market. To some extent, some growth stocks, even if they are overvalued, are more robust than some cyclical stocks. Therefore, at present, some institutions have adopted steady growth and added new portfolio bottom positions, mainly adopting some leading enterprises in the growth industry as configuration. " The person in charge of the above-mentioned private institutions said.

Risks remain

Although the organization's enthusiasm for innovation is high, its strategy is still based on two premises.

The first premise is that the supply of new shares is stable. In the view of industry insiders, as long as the market does not change significantly, it will not trigger the occurrence of related financial risks, and it will still be a high probability event that the IPO market remains active in the medium and long term.

"As long as there is no emergency, the registration system reform and supply of new shares will continue for a long time. This is not only related to financial support for real economy financing, but also related to the structural transformation of domestic economy and the key step from traditional economy to new economy. " "From the top-level design point of view, the continuous supply of new shares is of great significance," said a Shanghai securities firm investment bank

With the registration system reform copying to more stock market sectors, the supply rate of new shares is expected to be further accelerated. And regulators seem to be sending that signal.

In response to a reporter's question a few days ago, the relevant person in charge of the CSRC said, "in the next step, the CSRC will timely summarize and evaluate the pilot experience of the science and technology innovation board and the growth enterprise market, comprehensively study and formulate plans for implementing the registration system in other sectors, prepare for the reform of the whole market registration system, and steadily achieve the goal of registration system reform in stages."

A strategic analyst of a large securities firm in Beijing also said that if the registration system reform is further promoted to the main board and small and medium-sized board markets, the supply rate of new shares will be further accelerated in the future.

The second premise is that the high premium always exists and there will not be a large-scale break. On this point, there are some differences in the market.

On the one hand, many traders believe that speculation is still a difficult market habit in a short period of time due to the lack of circulation of new shares and market inertia.

"Because the market value of new shares is relatively small, it is easy to be fired. It can be said that speculation in new shares has become a inertia of the A-share market for many years, which is not particularly easy to reverse. " "So it's also the source of revenue from new strategies," said a trader at a private equity firm in Beijing

On the other hand, the number of new shares will continue to increase.

This expectation is not surprising. As a matter of fact, there have been many cases of breaking shares recently. For example, Kaisai bio broke the IPO four days ago, which really set a new record in the new stock market in recent years. In addition, after the reform of the selective market, many new shares also ushered in a collective breakout.

"The high premium state of new shares is an anomaly and will not last forever. With the gradual increase of the supply of new shares, the market gradually returns to rationality, and the funds are further grouped together. Not all new shares are expected to be pursued at a premium." "If not now, it will eventually be broken," said the analyst. A normal market is not only a new stock market, but also a market with breakouts. "