① According to the announcement, the four major banks of China Construction Engineering and Agriculture received a total increase of about 1,089 billion A-shares from Huijin Company. Based on the average price of the range, the total investment was about 4.82 billion yuan. ② Looking ahead to the later stages, the announcements of the four major banks all show that Huijin will continue to support the bank's long-term steady development.
Financial Services Association, April 12 (Reporter Gao Ping) On the evening of October 11, 2023, the four major state-owned banks of China Construction Industry and Agriculture jointly announced that Huijin would increase their holdings on the same day, and announced that Huijin will continue to increase their holdings in the secondary market for 6 months from the date of this increase in holdings. Now, the six-month increase period has arrived. On the evening of April 12, the four major state-owned banks collectively announced the increase in Huijin's holdings. According to the announcement, the four major banks of China Construction Engineering and Agriculture received a total increase of about 1,089 billion A-shares from Huijin Company. Based on the average price of the range, the total investment was about 4.82 billion yuan.
Industry insiders told the Financial Federation reporter that Huijin, as the majority shareholder, is more strategic. The increase in bank holdings by majority shareholders helps to increase bank capital and enhance operating capacity; Huijin's increase in holdings helps large banks stabilize stock prices and better achieve a controlling position over state-owned banks. Through such measures, it also sends a signal of stability and boosting market confidence, which is conducive to promoting the healthy development of the capital market.
The increase in Huijin's holdings was revealed, and the total holdings of Gongnong China Construction increased by about 1,089 billion shares
According to the announcement issued by the four major banks this evening, as of April 10, 2024, since October 11, 2023, the four major banks of China Construction Industry and Agriculture have obtained a total of 1,089 billion shares of Huijin.
Specifically, according to the Agricultural Bank's announcement, as of April 10, 2024, Huijin has increased its A-share holdings by a total of 401 million shares through the Shanghai Stock Exchange trading system, accounting for about 0.11% of the bank's total share capital. According to the data, Huijin holds a total of 140.489 billion A-shares of the Agricultural Bank, accounting for about 40.14% of the bank's total share capital. Based on the Agricultural Bank's average price of 3.85 yuan/share from October 11, 2023 to April 10, 2024, Huijin spent about 1,544 billion yuan to increase its holdings.
According to the announcement issued by the Bank of China, as of April 10, Huijin had increased its A-share holdings by a total of 330 million shares through the Shanghai Stock Exchange trading system, accounting for 0.11% of the bank's total share capital; Huijin held a total of about 18.792 billion A-shares of the bank, accounting for about 64.13% of the bank's total share capital. Based on the Bank of China's average price of 4.14 yuan/share from October 11, 2023 to April 10, 2024, Huijin has increased its total holdings and invested about 1,366 billion yuan.
Meanwhile, China Construction Bank also issued an announcement stating that as of April 10, Huijin had increased its A-share holdings by 71 million shares through the Shanghai Stock Exchange trading system, accounting for about 0.03% of the bank's total share capital. Based on the average price of 6.65 yuan/share from October 11, 2023 to April 10, 2024, China Construction Bank spent about 472 million yuan.
In addition, ICBC also disclosed the increase in Huijin's holdings. As of April 10, 2024, Huijin has increased its A-share holdings by a total of 287 million shares through the Shanghai Stock Exchange stock trading system, accounting for about 0.08% of the Bank's total share capital. Based on the average price of 5.01 yuan/share from October 11, 2023 to April 10, 2024, ICBC spent about 1,438 billion yuan.
Going back to the historical announcement, on the evening of October 11, 2023, the four major banks of Agricultural Bank, Bank of China, China Construction Bank, and Industrial and Commercial Bank collectively announced that the controlling shareholder of the company, Central Huijin Investment Co., Ltd. (“Huijin Company”) increased its A-share holdings on the same day and plans to continue to increase its holdings in the secondary market for the next 6 months.
Industry: The increase in majority shareholders' holdings helped boost investor confidence. The stock prices of the four major banks all rose by more than double digits during the period
Looking ahead to the later stages, the announcements of the four major banks all show that Huijin will continue to support the bank's long-term steady development.
Zhou Maohua, a macro researcher at the Financial Markets Department of Everbright Bank, said that Huijin's increase in bank shares as the majority shareholder is more strategic. The increase in majority shareholders' holdings will help increase bank capital and enhance operating capacity; at the same time, the economy is recovering steadily, and the trend in real economy business conditions is improving, which is beneficial to the bank's asset quality and profit prospects. Currently, bank stock prices are in a broken state, and the majority shareholders are optimistic about the bank's subsequent valuation repair market.
Zhou Maohua further stated that the majority shareholders' increase in bank stock holdings reflects, on the one hand, the majority shareholders' approval of the bank's operating conditions and increased confidence in its future development; on the other hand, the bank's current valuation is low, and it is still in a broken state, and the transaction is relatively cost-effective. Furthermore, the majority shareholders increase their holdings, which helps to enhance investor confidence.
Huijin is known as the national team. Dong Ximiao, chief researcher at CMB, said in an interview with a CFA reporter earlier that the current “national team” Huijin Company and China Securities Finance Company are actually similar to equalization funds in overseas markets. If the easiest and most direct method is to inject capital into these “national teams” on a large scale, the Ministry of Finance or the central bank can achieve a similar function of a leveling fund. “The increase in Huijin's holdings helps large banks stabilize stock prices and better achieve a controlling position over state-owned banks. At the same time, the adoption of such measures also sends a signal of stability and boosting market confidence, which is conducive to promoting the healthy development of the capital market. ”
According to Wind, from October 11, 2023 to April 10, 2024, the cumulative increase in A-share prices of the four major banks of Gongnong China Construction exceeded double digits. Among them, Bank of China had the highest increase of 20.32%, ranking second in the list of 42 A-share banks. Agricultural Bank increased 18.84%. In addition, ICBC and CCB had cumulative increases of 14.1% and 12.3%, respectively.