Financial Services, Feb. 21 (Reporter Zou Juntao) Insurance capital also has its time to be reckless.

On February 21, the A-share banking sector once again showed a general rise. Among them, Ping An Bank's stock price directly rose or stopped, and Bank of Ningbo, Qilu Bank, and China Merchants Bank increased by more than 5% throughout the day. According to Flush data, the banking sector index rose 2.2% throughout the day today and has been rising for 3 consecutive trading days.

However, the Financial Services Association reporter noticed that insured capital frequently sold many bank stocks or their convertible bonds until then, which just happened to be out of touch with this round of rising markets in the banking sector.

People's Insurance and Pension frequently sell Societe Generale Bonds and Societe Generale and Huaxia Bank A shares

On February 21, China People's Pension Insurance Co., Ltd. (hereinafter referred to as “People Care for the Elderly”) issued a number of related transaction announcements, stating that on February 5, February 7, and February 8, the company sold Industrial Bank A share convertible corporate bonds (“Societe Generale Bonds”) for a total of 217.581 million yuan, and the highest price for the three sales was 102.9 yuan/share.

Furthermore, according to the announcement, People's Insurance Pension Insurance also sold A-shares of Industrial Bank and Huaxia Bank several times at the end of January and the beginning of February of this year.

Among them, People's Insurance and Pension sold a total of 837,300 yuan of Industrial Bank A shares over the three trading days of January 26, January 29, and January 30, respectively. The highest transaction price sold during this period was 15.85 yuan/share. At the same time, People's Insurance Pension sold a total of 25.785 billion yuan of A shares over the four trading days of January 26, January 29, January 30, and February 1, respectively. The highest transaction price sold during this period was 6.2 yuan/share.

However, just after the People's Insurance and Pension Insurance began the above sales operation, the banking sector immediately ushered in a new round of market conditions, which in turn led to the continued rise in related convertible bonds. According to data from Dongfang Wealth, as of the close of trading on February 21, Societe Generale's bonds were reported at 103.867 yuan/share, up 0.94% from the highest price when People's Insurance and Pension were sold.

The two bank stocks performed even more brilliantly. The stock price of Industrial Bank has been around 7 times since February 1. As of today's close, the stock price has risen to 16.67 yuan/share, up 5.17% from the highest price when People's Insurance Pension was sold. Although Huaxia Bank's stock price rose slowly, it had 3 consecutive shares as of today's close. The stock price closed at 6.26 yuan/share, which is also higher than the previous highest transaction price for the People's Insurance Pension Sale.

According to data, People's Insurance Pension is a professional pension insurance company exclusively initiated by China People's Insurance Group Co., Ltd. (hereinafter referred to as “China People's Insurance”), and was approved to open in October 2017. According to the announcement, the People's Insurance Pension Service, Industrial Bank and Huaxia Bank are the same legal entities controlled or exerted significant influence by China People's Insurance Company, and the parties form related transactions.

Insurance capital continued to increase positions in bank stocks at the beginning of the year, and institutions are optimistic about high dividend value

A Financial Services Association reporter noticed that while some insurers are abandoning bank stocks, there are also insurers who are continuously increasing their positions in bank stocks.

In January of this year, after listing the Bank of Wuxi, Great Wall Life continued to increase its shareholding ratio to 6.36%, while increasing its convertible debt holdings of the Bank of Wuxi. In the same month, Minsheng Insurance issued an announcement stating that it had transferred Wanxiang Wanxiang Sannong's 720 million shares in the Internet Merchant Bank, totaling 2.196 billion yuan.

According to industry insiders, insurance funds value the long-term value return of capital investment, and bank stocks and blue-chip stocks have always been the focus of insurance holdings and equity assets.

In January of this year, Everbright Securities released a research report showing that as of January 23, the average dividend rates of A-share and H-share listed banks were 5.9% and 7.8% respectively, all at the highest level in history.

According to Everbright Securities Research, against the backdrop of economic growth expectations still weak and the “asset shortage” phenomenon in the capital market intensifying, the “stable profit, low valuation, and high dividend” fixed income assets represented by banks highlight the cost performance ratio of investment. In particular, for insurance funds that value the “value of debt” and are seriously underbalanced on the asset side, there may be a marked increase in willingness to allocate such assets. Looking ahead, insurance capital is expected to further increase the allocation of equity targets with both high ROE and high dividends.

A Financial Services Association reporter noticed that in response to the recent general rise in the banking sector, some research institutes still indicated that they were supported by bank high-yield stock factors. On February 20, Liu Chengxiang, an analyst at Open Source Securities, released a research report saying that the second structural interest rate cut in the year is expected to be implemented by superimposing real estate optimization policies, and a good start in credit is expected to balance “structural optimization” and “volume-price balance” with a high increase in total volume. I am more optimistic about the valuation repair of high-quality regional banks and the allocation logic of undervaluation+high dividend stock banks.