Editor: Wu Source: Rong 360 Original Date: 2014-11-28
Recently, the central bank's interest rate cut has caused great waves in the financial industry. The income of various wealth management products continues to be worrying, but the capital market is extremely active. Both the bond market and the A-share market have seen a short-term positive situation. As the leading sector of the financial sector, what impact does this interest rate cut have on bank stocks?
We know that the current net profit is a direct factor to determine the intrinsic value of a company's stock, which is generally expressed by earnings per share (that is, net profit/total number of shares). In China, the main source of commercial banks' profits is still spread income. Theoretically, the central bank's interest rate cut will narrow the deposit-loan spread of commercial banks, reduce the net profit and earnings per share, which will lead to the decrease of the intrinsic value of bank shares.
But in fact, in the capital market, the stock price mainly depends on the relationship between market supply and demand. In other words, if investors think that the future development of banks is better, they will increase their investment capital, which will greatly increase the net inflow of market funds, increase demand and push up the stock price. This is mainly because the state has further relaxed the deposit and loan restrictions on commercial banks. Although the deposit interest rate has been lowered, the floating range has also increased from 1. 1 times to 1.2 times, that is, the highest deposit interest rate is still 3.3%, which will inevitably stimulate the price war among commercial banks. The latest market reaction also confirms this point. A number of banks raised deposit interest rates, CITIC Bank and Ping An Bank. Deposit interest is the expenditure cost of commercial banks. Why does the increase in cost make the market optimistic?
Market competition is the source power to promote the development of the industry. In the competitive state, enterprises will actively seek the differentiation of their own products and brand values in order to enhance their competitiveness, thus injecting innovation power into the whole industry and improving the overall service level.
In addition, the decline in the benchmark loan interest rate will not actually have much impact on the interest income of commercial banks. In July of 20 13, China cancelled the downward limit of 0.7 times of the loan interest rate. The guiding significance of the central bank's reduction of loan interest rate is greater than the actual significance, and it is more about guiding and encouraging the promotion of commercial banks' loan business, which is not bad news for banks.
On the whole, according to Bian Xiao's analysis, on the one hand, the central bank cut interest rates in response to the downward threat of global deflation, aiming at adopting loose fiscal and monetary policies, increasing market capital flows and promoting investment enthusiasm, thus stimulating the growth rate of the economy and financial markets; On the other hand, it is also a major measure for further marketization of deposit interest rates. This kind of policy awareness is reflected in the capital market, and it will be seen that although the growth rate of net profit of commercial banks is expected to decline, the stock market of banks may not necessarily get cold. Specifically, it depends on the adjustment direction of the business strategies of major banks and the market behavior of investors.