Is the development of a new electronic settlement system for Hong Kong stocks a major killer that increases the yield by 8% every year?

The last few months have been updated a bit Buddhist, and many of my friends are still worried that I won't write. Don't worry, I've been secretly watching the market. The market is there, I'm there. It's just that there aren't many IPOs I've been able to watch before, and the new methodology is almost as written before, and I don't want to waste everyone's time by posting something that doesn't have any nutrition, so I haven't updated much.

OK, less nonsense. Today, I will continue to share with you a story that will have a huge impact on Hong Kong stocks. To what extent is the impact? My visual estimate is that it will probably affect the yield of close to 8% per year. Accumulated over a long period of time through compounding effects, it would probably be very exaggerated.

This is FINI. The Hong Kong Stock Exchange plans to fully implement the IPO electronic settlement system in June of this year. In terms of time, it's only been a little over two months.

So what are the specific effects of this system? I personally think there are two main points.

First, the settlement cycle was shortened from T+5 to T+2.

Second, the electronic system can block multiple huh with one click.

Let's talk about the first point, the settlement cycle. This is a huge benefit for new players, and it is also the main source of the 8% profit bonus I'm talking about. Because this will greatly reduce the interest costs and market risk of entering a new market.

Here I will explain in detail.

The current IPO cycle is T+5 settlement. There are 5 trading days from the purchase order (end of the offering) to when the dark market can be traded in the afternoon.

However, the number of interest calculation days is generally 6 days. Some companies that don't talk about martial arts may extend it for a few days; then it will take seven or eight days to calculate interest. Of course, if there is no weekend in between, there is a minimum of 4 days, but this is very rare (the stock offering must end on Monday). On average, the interest calculation period is more than 6 days.

So after June, the IPO settlement cycle changed to T+2, so what? I took a screenshot of the official picture. The pricing period was extended by one day, and the settlement period was shortened by 4 days.

As a result, the situation becomes:

From the end of the offering to the dark market, there were 3 trading days in between, which was shortened by 2 days.

The interest calculation period was changed from the regular 6 days to the regular 2 days, which was shortened by 4 days. If there is a bull market, the brokerage firm may be exempted from interest for the next two days, which is even more comfortable.

Summarizing the above, the T+2 settlement system requires, on the one hand, only 2 days of interest (even interest-free on popular stocks in a bull market), and on the other hand, most transactions can be made on the 3rd day after the new transaction is completed.

The benefits of lower interest rates are visible and palpable. It is relatively cold now, the winning rate is relatively low, and there is not much impact. Interest costs account for a large share of the market when the market is hot. Of course, if you just look at the present when I don't say anything, if you don't use financing to start a new project, I'm not talking.

In the long run, in the T+5 situation, the bear market is 1.5%, and the bull market hits 3%-6%. The total number of new bull markets is about 3.5%, which means that an average increase of 3.5% is enough to make money. Well, in the T+2 situation, there isn't much difference between a bull market and a bear market; when combined, it can be reconciled at around 1.8%.

According to my personal situation, on average, I can save about 4% of interest costs every year, to say less.

The advantage of being able to trade soon after a new game is that it greatly reduces market risk. It turns out they had to close for five days after starting a new business. If the market wasn't stable at the time, if companies in the same industry fell 10% or 20% in these 5 days, then they would close the door and beat the dog. Now, as long as we close the doors for 3 days, the risk exposure period has been reduced a lot, and the risk has been reduced accordingly. At the same time, reducing interest means reducing costs, and it is also tantamount to reducing the risk of losing some money.

The benefit of reduced risk is that for really good tickets, they dare to take positions even during the freezing period of the bear market. For example, in the past, Quanfeng Holdings, the market was very poor at the time, and the position was only 20%. If the market risk were shortened to 3 days, I would probably have held 30% of the previous position. Of course, increasing positions will also increase the possibility of losing money. As for the overall gross estimate, as far as I am concerned, I am less likely to say 4% more potential profit per year because risk has been reduced and potential positions have increased.

On the one hand, costs are reduced by an average of 4% per year, and on the other hand, revenue is increased by an average of 4% per year. Isn't this an average additional 8% of revenue per year coming out? Of course, I'm talking about a situation where I personally shot my head. Everyone's new strategy and risk appetite are different; there are probably still some differences.

Let's talk about the second question of multiple huh.

In the past, many people equated the real-name system with a duo-hu-ha. I said early in the morning that these are two things. The real-name system is mainly anti-Xiqian; it's not about doing too much. It was verified last month, and the real-name system was fully implemented. What should I do or what to do about the new one.

However, Fini, which arrived in June, is a bit different because it can technically kill many with one click. Just like an A-share person can use 3 accounts, but when it comes to new players, only the first submission is valid; the system for subsequent submissions will simply be cancelled for you. Fini, on the other hand, is even more so; it may have cancelled all Duohu's subscriptions.

Of course, I've always said it's possible and possible, that is, the fini system has this ability, and I've also heard from a few brokerage friends that they are ready to connect to the product. However, I personally don't think I can conclude that Daohu will definitely come to an end. After all, this is not in the interests of the Hong Kong Stock Exchange itself or most brokerage firms.

Of course, this is the case; the probability of multiple bans should be over 90%. The impact of the ban is mainly in terms of the winning rate.

Overall winning rate = winning rate per household* number of households.

The good news is that after a single household, during the bull market, it wasn't that popular. After all, there used to be more than 5 households per capita, but now there is probably only 1 household, and the winning rate for each household has increased greatly. The bad news is that most people can only use one account to open a new account.

Generally speaking, the overall winning rate for most people is probably declining. A few people are planning ahead, and the impact may not be significant.

Of course, the winning rate is an issue that only needs to be considered in a bull market. In fact, I think the IPO bull market is coming soon. Earlier, I said that the valuation situation in the IPO market has improved, and market sentiment has improved; we just have to wait for good votes to arrive. Recently, quite a few tickets that can be viewed, including JD Shuangxiong, have been submitted one after another. Among the tickets that have been handed out so far, the fundamentals don't seem too bad, and it is estimated that there are no less than 10. I won't go into the details; I'll naturally be able to write when I get there, so just keep an eye on it.

The weather is convenient, and the people are ready. My personal guess is that in about 3 months, the IPO market will gain momentum. Sharpen your knife, Huho, wait for the wind!

OK, that's it for the FINI analysis. Those with different opinions are welcome to discuss. I think it's pretty good, so stay tuned.