The social security holdings reduction transaction has finally come to fruition!

On July 16, the Bank of Communications issued an announcement stating that since the beginning of the month, the Social Security Foundation has reduced the Bank's A-share holdings by about 395 million shares through authorized securities companies through collective bidding, accounting for more than 53% of the planned holdings reduction, and cashed out a total of 2.163 billion yuan.

Prior to that, the bank received a notice from the Social Security Foundation in early June. The latter plans to reduce its holdings by no more than 743 million shares of A-shares within 6 months of 15 trading days from the date of the announcement. The Exchange Bank said at the time that this reduction in holdings is a regular investment business arrangement for the Social Security Foundation and will not affect market-based business cooperation between the two sides.

Furthermore, entering the second half of the year, shareholders and executives of seven listed banks, including Bank of Zhangjiagang and Bank of Ningbo, have issued holdings reduction announcements or completed holdings reduction actions. Meanwhile, shareholders and executives of five banks, including Bank of Chengdu and Pudong Development Bank, have successively increased their holdings.

The Social Security Fund reduced its holdings by nearly 400 million shares and traded A-shares

In fact, as early as April 2019, the Stock Exchange issued an announcement stating that it had received a notice to reduce its holdings from the Social Security Foundation, the third largest shareholder. At the time, the latter planned to reduce its holdings by no more than 743 million shares within 3 months, or no more than 1% of the total share capital of the bank; within 6 months, the cumulative reduction of holdings by no more than 1.49 billion shares, that is, no more than 2% of the bank's total share capital.

At the time, based on the largest scale of planned holdings reduction, the market value of this portion of equity was about 9.3 billion yuan. The rare reduction in bank stock holdings by social security also continues to attract attention from the outside world.

However, judging from the actual situation, during the holdings reduction period, apart from transferring the 743 million stock exchange A shares held to the “CITIC Securities-Social Security Fund Stock Flexible Allocation Product Portfolio”, the Social Security Foundation has made no other action, and the special account has not reduced its holdings since then.

By the beginning of June this year, the Bank once again disclosed that it had received a notice from the Social Security Foundation. The latter will reduce its A-share holdings by no more than 743 million shares through centralized bidding or bulk trading within 6 months of 15 trading days from the date of the announcement.

According to the brokerage firm's Chinese correspondent, the holdings reduction plan disclosed this time is aimed at this portion of shares that have already entered a special holdings reduction account; it is not an additional reduction in holdings.

However, since the beginning of July, this special account has actually reduced its holdings. According to the stock exchange announcement, from July 2 to 15 (10 trading days), the Social Security Foundation has reduced its holdings of about 395 million shares of A-shares traded through collective bidding by authorized securities companies, reaching 53.13% of the planned reduction in holdings.

According to the announcement, the price range for this holdings reduction is 4.96 yuan to 5.77 yuan, and the Social Security Foundation has cashed out a total of 2.163 billion yuan. After reducing its holdings, the Social Security Foundation still holds about 12.508 billion shares in the Bank, accounting for 16.84% of the bank's total share capital.

According to information, the Social Security Foundation's investment in the Bank includes two major parts: A shares and H shares. After this reduction in holdings, it still holds about 3.453 billion shares of traded A shares, including two major sources:

First, about 1.88 billion shares were subscribed for when participating in the bank's non-public offering in 2012. Of these, 743 million shares have been transferred to the aforementioned special holdings reduction account, and the reduction of 395 million shares has been completed; the remaining shares are directly held by the Social Security Foundation.

Second, at the end of last year, the Ministry of Finance transferred 10% (about 1.97 billion shares) of the original shares of traded common stock to the Social Security Foundation at one time. Currently, this portion of the shares is held by the Social Security Foundation's state-owned capital transferred to six households.

On the other hand, the approximately 9.055 billion H-share shares held by the Social Security Foundation are regarded as its basic investment in the stock exchange.

The relevant person in charge of the stock exchange bank told the brokerage firm China reporter that the current holdings reduction plan will not affect the basic investment holdings of the Social Security Foundation in the stock exchange, nor will the status of the Social Security Foundation as an important strategic investor and important business partner of the stock exchange change.

Frequent increases and decreases in bank shareholders' holdings and executives

Along with the ups and downs in the bank stock market, since the beginning of July, in addition to exchanges, several listed banks have announced plans to reduce shareholders' and executives' holdings, or completed substantial holdings reductions.

On July 13, the Bank of Zhangjiagang issued an announcement stating that the shareholder Jiangsu Lianjia Asset Management Co., Ltd. plans to reduce the bank's shares by 5 million shares through collective bidding based on business development needs, accounting for 0.28% of the bank's latest total share capital;

On July 10, Bank of Ningbo announced that the Bank's third-largest shareholder, Youngor Group, plans to reduce its holdings by no more than 120 million shares through centralized bidding within six months, accounting for 2% of the bank's total share capital;

On July 9, according to information from the Hong Kong Stock Exchange, Bank of Guizhou shareholder Mingyuan Group Investment Limited sold 140 million shares of the bank through bulk transactions on the same day, cashing out HK$347.2 million;

On July 9, according to information from the Hong Kong Stock Exchange, Hong Kong Ruijia Trading Co., Ltd., a shareholder of the Bank of Gansu, sold 142 million shares of the bank off-market, bringing out a total of HK$149 million;

On July 7, according to information from the Hong Kong Stock Exchange, the Postbank was reduced by J.P. Morgan Chase & Co., J.P. Morgan Chase & Co., by about 21.9017 million shares, involving about HK$105 million;

On July 7, the Bank of Zhangjiagang announced that Shagang Group, the largest shareholder of the bank, plans to reduce its holdings by no more than 29.5 million shares due to its own investment restructuring, accounting for no more than 1.63% of the bank's latest total share capital;

On July 7, Sunong Bank announced that Wang Chunliang, the company's deputy governor, plans to reduce the bank's shares by no more than 114,900 shares due to personal capital needs;

On July 3, according to information from the Hong Kong Stock Exchange, Luzhou Baijiu Golden Triangle Liquor Development Co., Ltd., a shareholder of Luzhou Bank, reduced its holdings by 10 million shares on the market on the same day, bringing out a total of HK$32.5 million.

At the same time, shareholders and executives of a number of listed banks completed large-scale increases in their holdings this month. Includes:

From July 10 to 16, Pudong Development Bank Governor Pan Weidong and four deputy governors increased their holdings of the bank's A-shares by a total of 314,900 shares, at a total cost of about 3.6 million yuan. This is also the third year in a row that the bank's senior management has increased their holdings;

On July 10, according to information from the Hong Kong Stock Exchange, UBS Group increased its holdings of China Merchants Bank H shares by 1,029,000 on the same day, at a total cost of HK$4,03576 million. After the increase in holdings was completed, UBS held approximately 275 million shares of CMB H shares;

On July 9, according to information from the Hong Kong Stock Exchange, Jialong Investment Group increased its holdings of Bank of Gansu H shares by about 149 million shares through a brokerage asset management plan, at a total cost of about HK$157 million;

On July 3, the Bank of Jiangsu announced that from mid-March last year to July 2 of this year, Jiangsu Phoenix Publishing and Media Group, the bank's second largest shareholder, and its co-actors increased their holdings of Bank of Jiangsu by a total of about 126 million shares, accounting for 1.094% of the bank's total share capital;

On July 2, the Bank of Chengdu announced that the bank's shareholder, Chengdu Industrial Investment & Investment, increased its holdings by 12,400 shares on July 2. After the increase in holdings was completed, the shareholding ratio of Chengdu Industrial Investment Corporation rose to 5%.