Kunlun Trust Development Research Weekly Information No. 178

Research Results
2014/11/04 14:29


Under the "new normal", the trust industry is facing three major difficulties

In judging the current macroeconomic situation, the formulation of the "new normal" has been generally accepted. The "new normal" refers to the economy shifting from high-speed growth to medium-high growth, from structural imbalances to optimal rebalancing and from policies of easing and extensive stimulation to overall volume stabilization and structural optimization. The financial "new normal" should be coupled with "institutional regulation" to "functional regulation" change.

The "new normal" of China's macroeconomy has guaranteed the long-term interests of the people, but inevitably has to abandon a lot of old production capacities, old models and old structures. When the economy breaks new ground, it will inevitably undermine the interests of some interest groups, including the trust industry that has developed and prosped under the old model. Under the "new normal," it is necessary for the trust industry to reposition itself and take the initiative to abandon its old business model and inject new impetus into the continuation and development of its own life. Only in this way, the sense of crisis as the dawn of the trust industry can be completely eliminated.

First, the credit risk brought by the adjustment of the economic supply side has intensified

At present, the current status of China's economic structure is that supply is greater than demand. Supply is undergoing deep adjustment. Excess capacity and digestion of inventories have become problems that many industries face together. When supply side adjustment, many enterprises that can not generate normal cash flow will be forced to clear the market, derived and conducted the industry risk and regional risk. Among them, the trust industry has been deeply involved in real estate over the past few years, the credit risk in the coal and mining industries is particularly serious. The constant exposure and proliferation of credit risk is a test of life for the trust industry.

Guided by the central government's macroeconomic policy of taking the initiative to choose a supply side adjustment, the diversified dominant traditional businesses of various types of trust companies will be drastically reduced or forced to terminate. For example, in the current real estate market is cold, the trust company's stock real estate projects held by the trust fund risk is extremely exposed, not to expand the real estate business; the central government decided to divest the financing function of local government financing platform, local government debt will be Dredging municipal bonds and PPP mode, the future release of trust trust products will be substantially reduced.

Second, a sound monetary policy makes the liquidity risk of trust assets magnified

Although M2 has now surpassed 100 trillion yuan, the year-on-year slowdown in the velocity of currency has led to a drop in the overall liquidity of assets. In the past, the solution to the liquidity problems of trust assets relied on the funds held by the trust companies or the shareholders. However, with the overall economic risks raised and the investors' investment prudence modest, the past access methods have become increasingly difficult to operate. The liquidity risk of trust assets caused by liquidity contraction has been continuously enlarged.

The Trust Fund for Protection, which the regulators started to initiate and prepare in September this year, is an initiative to solve the problem of liquidity of trust assets. The liquidity problem will greatly enhance the possibility that trust assets will become bad debts. Proper liquidity replenishment can reduce the probability of loss of trust assets and reduce the systemic risk in the trust industry. In the future, liquidity risk remains the most critical risk facing the trust industry. It is impossible to completely solve this problem by relying solely on the trust fund for the trust industry, and it is also necessary for the trust industry to transform its existing business model and profit model.

Third, the advantages of the trust license almost disappeared

The 2012 Regulatory New Deal opened the Fund's investment portfolio and made it a strong competitor to traditional businesses in the trust industry, diluting the license dividends previously owned by the trust industry. And this year the imminent implementation of new securities and asset management policies brokerage New Deal, then further broaden the scope of investment brokerage investment and asset management, the trust industry was pulled back to a unified starting line. Not only that, these competitors are likely to catch up with the trust industry in the future with the help of their respective channel advantages and other financial functions.

Recently, the Securities and Futures Commission Asset Management Business Management Measures (draft) allow the securities companies to invest in all asset management plans from the current stock and bonds and other conventional varieties extended to non-listed equity, debt and other non- Standard business. With this policy dividend, the securities firm will have a private equity investment banking license. In the future, the brokerage firms can consolidate internal resources and unify the public offering and private investment banking businesses. The State Council announced on August 13 that the "New 10 Statements" of the insurance industry clearly "encourage the establishment of professional insurance asset management agencies for real estate, infrastructure and pension and allow professional insurance asset management institutions to set up private equity funds such as mezzanine funds, M & A funds and real estate funds; We will steadily promote pilot projects for insurance companies to set up fund management companies, explore insurance institutional investments and launch asset-backed securities, explore the development of bond credit insurance, and actively cultivate alternative investment markets. " As a result, insurance companies can not only set up public fund companies, but also set foot in the private equity market and alternative investment markets. In addition, the CIRC recently issued a Circular on Standardizing Investment-linked Account for Investment-linked Insurance Accounts (Draft for Comment) to individual life insurers and opened up the possibility of investing non-standard assets within a limited percentage.

Compared with the trust company, brokers and insurance companies have a wealth of channel resources, while brokers also have the advantage of open market investment, insurance products have protective functions. In this respect, the trust value of the trust company is even worse than that of other asset management agencies. With the implementation of "functional supervision" gradually recognized by regulators, there is no special license bonus for a certain type of asset management institution. The rebalancing and reunification of regulatory standards will be the trend of the times.

Macro situation

Ministry of Finance: Initiation of local stock debt clearance screening, pushing the PPP model

The Ministry of Finance announced on October 28 that the immediate initiation of the local government's stock of debts will be included in the budget management and clearance work. All local governments shall clean up and screen the debts that have not been settled before December 31, 2014. This is the latest supporting document formulated by the Ministry of Finance after the State Council released "Opinions on Strengthening Local Government Debt Management" (Circular 43) on October 2. According to this measure, the screening of the local government's stock of debt will be led by the local government, with the financial department taking the lead and the departments and units responsible for the blame. The purpose is to "lay the foundation for the government debt into the budgetary management of the entire budget" . In particular, the Measures emphasize "to promote the PPP model (that is, the cooperation between the government and social capital)" so as to "not only encourage social capital to participate in the provision of public goods and public services and obtain reasonable returns, but also relieve the pressure on government public finance to borrow and release More funds for the purpose of the focus of livelihood projects. " The Ministry of Finance clarified that the conversion into corporate debt through PPP would not be included in the government debt. The project had no return. The source of the project's solvency relied mainly on the revenue from the general public budget and was classified as general debt, such as compulsory education debt.

Central Bank: The growth rate of corporate loans dropped in the third quarter, real estate loans grew rapidly

On October 28, the central bank released the third quarter of 2014 financial institutions loans to invest in statistical reports. The report shows that at the end of the third quarter of 2014, the outstanding loans of various renminbi in financial institutions amounted to 79.58 trillion yuan, an increase of 13.2% over the previous quarter and 0.8 percentage points lower than the previous quarter; an increase of 7.68 trillion yuan in the first three quarters, an increase of 4045 100 million yuan. Loan investment showed the following characteristics: corporate loans increased year on year, the growth rate dropped; small and micro enterprises loans growth slowed down, the growth rate is still higher than the loans; industrial and service growth rate of medium and long-term loans dropped; Slow down, farmers loans, rural loan growth is still higher than the various loans; real estate loans grew rapidly, growth slowed down; household loan growth down.

CIRC: Overweight regulatory investment trust business

For insurance funds investment in the field of trust plan triumph, the China Insurance Regulatory Commission issued a series of text to be warning norms. Recently, the CIRC issued a document requesting that the approved value of insurance capital to be invested in the trust plan be reduced by 5%. In May this year, the CIRC regulated the scope of the underlying assets of the insurance investment trust plan issued by the CIRC in May this year.

According to the data from CIRC, as of the end of the second quarter of this year, 78 insurance companies (groups) have accumulatively invested 280.5 billion yuan in trust plans, of which 92.9 billion yuan was real estate investment, accounting for 33.1%.

A number of insurance investors said that good trust projects are scarcity, while regulatory overshooting leads to higher capital cost. In the second half of the year, the insurance capital will be invested in advance equity, debt investment plans, wealth management products and asset securitization products.

Industry News

Xinhua Trust replenishment 1.8 billion

Following CITIC Trust, Xinhua Trust will become another large-scale capital increase in October, the mainstream trust company. It is reported that Xinhua Trust is about 1.8 billion yuan of capital increase, the capital increase is completed, the company's registered capital will be 1.2 billion from the previous expansion to 3.0 billion. As of the end of 2013, Xinhua Trust managed more than 160 billion yuan of assets. It is understood that Xinhua Trust was the last capital increase in December 2012, Xinhua Trust part of the undistributed profits turned into registered capital, after the transfer of registered capital of 1.2 billion.

With the rapid development of Xinhua Trust's business, the original net capital and net asset size have restricted the business development to a certain extent. In the meantime, the Company replenished its capital through capital increase and share expansion, significantly expanded its net capital scale and expanded asset management in the future Scale and improve profitability is of great significance.

Sichuan Trust reproduce illegal non-standard asset pool

In early April, the "Circular 99" issued by China Banking Regulatory Commission was called the strictest regulatory measure in the history of the trust industry, in which it explicitly demanded that the trust company clean up non-standard capital pool business. But six months later, the capital pool products have not stopped. Sichuan Trust a product called Tianfu Juxin No. 3 on the alleged non-standard capital pool business. Access to information found that the trust plan "is the Sichuan Trust was formally established on January 28, 2014, was established scale of 34 million yuan, a period of 10 years.According to informed sources, the current fund-raising this product nearly 10.9 billion yuan, Is a typical non-standard capital pool products, the risk is the pool itself, the period mismatch risk and non-standard project default risk superposition.

Fourth quarter credit will accelerate the bias railway, electricity and other infrastructure areas

Recently, the State Council executive meeting proposed to improve the current lack of investment momentum, stable and effective investment. Experts believe that the next credit is expected to further increase the intensity, and railways, electricity, airports and other infrastructure construction areas will become the focus of credit. According to the analysis, as the Chinese economy is in a crucial period of restructuring in the first half of the year, the performance of the various core growth indicators is not so good. The downward pressure on the economy gradually increases, increasing the credit distribution and accelerating the pace of infrastructure construction have become the consensus. Next, the credit delivery is expected to further increase, with emphasis on capital investment in areas such as railways, electricity, airports, shantytowns, agriculture and water conservancy.

Trust in the third quarter contraction of the political front, the average monthly financing fell nearly 20%

Beneficial Trust data show that in the first two quarters of 2014 compared with the average monthly financing of infrastructure fund trust of 16.66 billion yuan, the third quarter, the average size of 13.82 billion yuan fell by nearly 20%. Analysis pointed out that the decline in financing scale, including the regulatory supervision of regulatory bodies and the decline in the size of the overall establishment of collective trust, trust companies seeking to avoid local debt risks, resulting in a corresponding decline in the size of infrastructure trust financing.

Suning hand in CITIC, real estate investment trusts welcome the development of new opportunities

Suning cloud business recently announced that it intends to its 11 wholly owned subsidiary of the relevant rights and interests, about 40 billion yuan transferred to CITIC Jinshi Fund Management Co., Ltd. (hereinafter referred to as "CITIC Jinshi") to be launched by private equity funds. After the transfer, on the one hand, Suning Cloud Business will determine the transaction price according to the fair value of the market, obtain the value-added revenue of the store and return the cash, and on the other hand, obtain the long-term use right of the store property with a stable lease price and long-term lease. The reason why CITIC Securities chose the 11 high-quality store assets of Suning's cloud-based stores in Beijing, Chengdu and Chongqing is its full affirmation of its value and possible future value-added. Suning cloud business currently has 44 stores, 11 stores to be sold in a better location, the property value is high, due to the early acquisition of this part of the store, the company is expected to be sold after the sale of at least 1.3 billion one-time net income after tax.

Insiders said that this "after-sales rentback" approach to operation, in essence, is the process of asset securitization. As CITIC Securities is the parent company of CITIC Jinshi, the store where CITIC Jinshi targeted Suning Cloud Business is also seen as an important step towards commercialization of CITIC Securities REITs model.

Trust companies securities investment business this year by Bacheng

The latest statistics show that this year, 68 trust companies issued a total of 1717 securities investment trust products, an increase of 80% over the same period and the issue size reached as high as 70.05 billion yuan. In the meantime, property-related trust products were cold-tempered. The size of real estate trust products plunged from nearly 20 billion in June to less than 3 billion this month. The number of issuances plummeted from 105 in June to This month's 27, for 5 consecutive months, "thin" nearly 4 times.

Last week, a total of 21 trust companies set up 48 collection trust products, of which 18 were established in the field of securities investment, 8 were established in the infrastructure area, and only 7 were established in the real estate field. Securities investment trust accounted for up to 37.5%. In fact, last week was just a microcosm this year. This year, the prudential issue of the entire trust product, financial trust products are still favorable. Especially since the third quarter, many trust companies are happy to issue securities investment trust products and gradually more securities investment products are launched, and the issuance of such products continues to be optimistic. Securities market improved from July, making the customer investment will increase, contributed to this wave of securities investment trust boom.

In the third quarter, the five listed companies received a large increase in trust

Carding the third quarter listed companies found that 1070 companies, the trust company holds 53, of which more than 10 million shares of 14, respectively, Southwest Securities, China Pacific Insurance, Sky Control, Shanxi Coking, Zijin Mining, Founder Technology, the six countries chemical industry, JAC, Shanxi Securities, Oriental Jin Yu, China Merchants Property, Dulwich new material, BesTV, IETF fly. Among them, there are 9 new stocks in the third quarter, with their respective industries concentrated in insurance, new materials, real estate and media industries. There were five trust companies holding more than 5 million shares in the third quarter from the second quarter, namely Founder Technology, JAC, IETF, Tomson times Kin, and Handels. The third quarter, the Trust Company more holdings of the third quarter results better overall, except Jianghuai third quarter net profit fell 43.6%, the remaining four stocks in the third quarter net profit growth of more than 20%, of which Founder Technology Profits increased by 125.76%, IFT's net profit increased 41.22%, Tomson times Kin net profit increased 35.37%, Hande information net profit increased 23.87%.

Trust last week set up a scale of 16.68 billion yuan, the average expected rate of return of 8.83%

According to the latest statistics, a total of 60 trust companies were set up in 28 trust companies last week (October 20-26). Among them, 29 announced the establishment of a trust fund with an average size of 278 million yuan. According to the average size of estimates, the total size of trust products set up last week was 16.68 billion yuan, a decrease of 5.947 billion yuan, a drop of 26.28%. Judging from the expected rate of return on trust products, a total of 34 newly established products were announced last week with an average term of 23.03 months, a decrease of 1.24 months on a month-on-month basis. Among them, last week a total of 20 newly established products announced the expected rate of return, the average expected rate of return 8.83%, up 0.20 percentage points.

In terms of trust types, there are 25 securities investment trusts established, 11 other investment trusts, 8 equity investment trusts, 8 loan trusts, 5 debt trusts, and the establishment of a portfolio investment trust 3 models

In addition, a total of 79 trust products from 35 companies were due for expiration of trust products last week. Among them, equity investment trust 21; loan trust 19; debt investment trust 11; other investment trust 10; securities investment trust 9; equity investment trust 5; portfolio investment trust 4 paragraph.

Present: Kunlun Trust Co., Ltd. shareholders, directors, supervisors and senior management

Distribution: CNPC Asset Management Co., Ltd., Kunlun Trust Co., Ltd. departments

Editor: And Jin to feed: Huo Tianxiang proofreading: Lin Yin

Tel: 010-63597713 Post Code: 100033 Address: Beijing Financial Street, No. 1 Jinyaguang Building, Room 716, Block B

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