2014-11-10

Trust Assets Flowing into Equities

Amid the trust and real estate slowdowns, one possible winner was the stock market. Evidence continues to show money is indeed flowing in that direction. Trust investments in basic industries tumbled and real estate was stable in Q3, while flows into financial institutions and securities markets picked up.

From Yanglee.com: 信托资金加速流入股市

Data disclosed in the third quarter showed a trust fund flows is undergoing significant change, to invest in businesses, funds accounted for the decline in basic industries, to invest in financial institutions, the proportion of funds in the stock market to improve, but to invest in real estate funds basically remained stable .

  In the economic downturn intensified, with the competition context, the operating pressure Chinese trust industry is growing. Data according to the China Trust Industry Association released the latest trust industry in the third quarter, the trust industry assets rose steadily, a new record high, reached 12.95 trillion yuan, but the growth rate fell significantly benefit trust. From the capital flows, to invest in businesses, financial accounting basic industries declined while to invest in financial institutions, the proportion of funds in the stock market rise.

  China Trust Industry Association statistics show that as of the end of the third quarter, the scale of trust assets under management of the trust industry 12.95 trillion yuan, an increase of 18.70% compared with 10.91 trillion yuan at the end of last year; the end of the second quarter of this year compared with 12.48 trillion yuan, growth 3.77%. However, QoQ growth perspective, the third quarter is not only the continuation of the first quarter since the beginning of 2013 continued to trend down, but the drop rate increased significantly. In this regard, experts governing China Trust Industry Association, Zhou Xiaoming pointed out that the impact of the economic cycle and the effect of the weak against the strong competition in the market has significantly increased the trust industry.

  This year, the trust products are frequent cases of risk, it also raised concerns about the overall risk of social trust industry. In order to enhance the ability to resist risks, trust companies have to increase their investment, trust inherent capital growth significantly accelerated. By the end of the third quarter of this year, the average family trust paid-up capital has reached 1.902 billion yuan, 4.239 billion yuan over the ownership of those interests. Zhou Xiaoming pointed out that although the trust industry in transition monomer products increased risk of exposure, but the risk of isolation between institutional arrangements and trust products trust industry strong overall capital strength, it is able to control the overall risk of the trust industry, is unlikely to lead to system Two fundamental starting point for risk.

  June to September, the Trust Risk project size dropped to 82.4 billion yuan from 91.7 billion yuan, the total trust assets ratio fell to 0.68 percent from 0.73 percent. Trust business risk assets, risk asset ratio to achieve "double down" over the second quarter, the trust industry risk situation is generally stable.

  Due to the economic downturn and market competition and other factors, the third quarter 2014 operating results of industry-wide slowdown in the growth. 2014 second quarter, third quarter operating income was 22.014 billion yuan, 20.981 billion yuan, the chain growth rate was 23.22% - 4.69%. 2014 second quarter, third quarter net profit was 12.78 billion yuan, 11.254 billion yuan, the chain growth rate was 29.97% - 11.94%.
 
 Of particular concern is that from the point of view to invest trust funds, disclosure of the third quarter showed that the trust fund flows is undergoing significant change, to invest in businesses, funds accounted for the decline in basic industries, to invest in financial institutions, financial securities market accounting for upgrading, and invest in real estate funds basically remained stable. The reason is mainly due to the economic downturn, policy guidance and other factors, trust reduces the need for businesses and basic industry involvement. And because of the trust industry to strengthen financial synergies, fluctuations in the financial sector investment and return is not stable market factors, and increased investment in financial institutions.

  End of the third quarter, the size of the trust securities to 1.74 trillion yuan, accounting for 14.27%. Compared to last year, accounting for 10.55 percent of late, up 3.72 percentage points; accounting for 12.75 percent compared to the second quarter of this year, raised 1.52 percentage points. Securities investment trust funds accounted for the upgrade, mainly due to capital market investment value appearing asset allocation and investment diversification requirements and other market factors.

  Real Estate Investment Trust in the third quarter the size of 1.27 trillion yuan, accounting for 10.38%. Different configurations and other areas, the configuration of the real estate trust funds in recent years has been performing as relatively stable. Compared to last year, accounting for 10.03% of the end, a slight increase of 0.35 percentage points; at the end of the second quarter of this year compared to the proportion of 10.72%, a slight decrease of 0.34 percentage points. Zhou Xiaoming pointed out that the above characteristics of the real estate trust funds configurations, with short-term fluctuations in the real estate market stable, long-term exposure increases the risk characteristics related. With the real estate industry risk exposure in the second quarter of this year, he expects the trust fund to invest in real estate in the future or will be more cautious.

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