RMB60 billion of incremental capital is waiting to enter the market.

The full list of winning brokerages in the third batch of Swap Facility (SFISF) operations is out! The People's Bank of China's third batch of Securities, Funds, and Insurance Companies Swap Facility (SFISF, hereinafter "Swap Facility") operations has landed, with 31 securities and fund companies participating in the bidding. The reporter learned that a total of 26 brokerages won bids in this batch, of which 9 disclosed specific amounts, totaling close to RMB60 billion. There is no doubt that the total scale of brokerage bids in this round has exceeded RMB60 billion. The largest was CICC, with a winning bid of RMB16.3 billion; CITIC SEC and Guotai Haitong each won RMB10 billion, Guotou Securities RMB6 billion, Soochow RMB5 billion, Zheshang RMB4 billion, Caitong RMB3 billion, China Great Wall RMB2 billion, Guolian Minsheng RMB1.5 billion, and Huafu Securities RMB1.2 billion. In addition, Huatai, GF SEC, CMSC, China Galaxy Securities, Shenwan Hongyuan Group, Guosen, China Securities Co.,Ltd., Orient, EB SECURITIES, Founder, Zhongtai, East Money Information Securities, Guolian Minsheng, Ping An Securities, Sinolink, Industrial, and Hongta have confirmed winning bids but have not yet disclosed specific amounts. What draws more attention than the amounts is how the quotas will be used once obtained. Several brokerages have explicitly stated that they will put the funds into full use as soon as possible to increase holdings of stocks and stock ETFs; CICC completed its first pledged repo transaction under this operation on November 4. 26 brokerages won bids Looking at the 9 brokerages that have disclosed amounts: CICC at RMB16.3 billion was the largest winning brokerage, and it is worth noting that CICC completed its first pledged repo transaction under this Securities, Funds, and Insurance Companies Swap Facility operation on November 4. CITIC SEC and Guotai Haitong each at RMB10 billion form the top tier of RMB10 billion-level players; Guotou Securities at RMB6 billion and Soochow at RMB5 billion sit in the middle; Zheshang at RMB4 billion, Caitong at RMB3 billion, China Great Wall at RMB2 billion, and Huafu Securities at RMB1.2 billion. Compared with previous batches, Guotai Haitong's winning bid of RMB10 billion this time exceeds the combined RMB7.5 billion from the first two batches, with a single-batch scale already surpassing the sum of the previous two. Zhu Jian, Party Secretary and Chairman of Guotai Haitong, said the company this time "participated in the third batch of Swap Facility business with greater intensity," and the RMB10 billion will be fully put into use as soon as possible after the Swap Facility operation to form synergy with peer institutions. Many brokerages are not participating for the first time. CMSC said it will continue to actively use the Swap Facility tool on the basis of making good and full use of it in the earlier period; China Galaxy Securities said the funds applied for this time are intended to extend the previous investment direction and support the company's continued long-term asset allocation in the equity market. In addition to the above 9, Huatai, GF SEC, CMSC, China Galaxy Securities, Shenwan Hongyuan Group, Guosen, China Securities Co.,Ltd., Orient, EB SECURITIES, Founder, Zhongtai, East Money Information Securities, Guolian Minsheng Securities, Ping An Securities, Sinolink, Industrial, and Hongta have confirmed winning bids. When will the Swap Facility be used? "Accelerate" and "as soon as possible" appear most often In the statements of various parties, "accelerate" and "as soon as possible" appear most frequently. Soochow, Zheshang, and Huafu Securities all mentioned the need to accelerate the use of this winning quota and the implementation of business, while Caitong's wording was to accelerate the use of the newly added quota; CITIC SEC said it will use the policy tool in compliance with regulations as soon as possible, China Galaxy Securities said it will put the borrowed funds into use as soon as possible, and EB SECURITIES emphasized compliant and efficient use of the quota and accelerating business implementation. Ping An Securities said it will use the Swap Facility financing quota in batches in light of market conditions and regulatory guidance. Ping An Securities also disclosed that staffing, business processes, technical systems, and collateral preparation are all in place, ensuring rapid launch and smooth operation of the business. Market making, quality stocks, long-term allocationinvestment directions vary On the destination of funds, stocks and stock ETFs are almost the common answer, but on closer inspection there are still differences. Soochow Chairman Fan Li said the company will further increase holdings of stocks and stock ETFs; Shenwan Hongyuan Group said it will continue to step up allocation to equity assets such as stocks and ETFs; Ping An Securities also mentioned increasing allocation to equity assets such as stocks and stock ETFs. Guolian Minsheng Securities gave the most specific description: the borrowed funds will be focused on investment in and market making for stocks and stock ETFs, with market making being a rarely separately highlighted use. Industrial said it will "actively carry out investment in quality stocks," China Galaxy Securities emphasized long-term asset allocation in the equity market, and Guotou Securities proposed coordinating liquidity management and equity investment. Many brokerages positioned their own roles in their statements. Huatai said it will play the role of patient capital and stabilizer; GF SEC proposed making full and substantive use of policy tools and playing the role of patient capital and "ballast"; EB SECURITIES focused on the "ballast" role of capital market intermediaries and improving market liquidity. Soochow and Caitong both mentioned cultivating and strengthening patient capital, Guotou Securities and Hongta emphasized injecting long-term stable funds into the capital market, and Orient said it will promote the entry of medium- and long-term incremental funds into the market. How do brokerages view this batch of Swap Facility operations? Wang Yifeng, Deputy Director of the EB SECURITIES Research Institute, believes that the Swap Facility revitalizes the stock assets held by institutions through "swapping securities for securities," removes liquidity blockages, lowers actual financing costs, and directly enhances institutions' capacity to increase holdings of equity assets. In his view, this RMB100 billion-level operation, combined with institutional optimization, directly addresses the liquidity pain points of non-bank institutions; the reduction in winning bid rates and the expansion of the collateral scope push institutions to leverage their professional investment capabilities and driving effects; and the Swap Facility reaches directly to the investment end, promoting the entry of incremental funds into the market and helping repair market risk appetite. Ping An Securities analysis holds that this operation, once again stepped up, will affect the capital market in three ways. First, it directly supplements institutional liquidity, providing institutions with low-cost funding sources specifically for stock investment and enhancing market absorption capacity; second, against the backdrop of a complex and volatile external environment and somewhat increased market volatility, it releases a clear signal of safeguarding the smooth operation of the market, and the enthusiastic participation of institutions itself also demonstrates professional investors' confidence in the market's long-term prospects; third, it works in synergy with tools such as relending for stock repurchases and increased holdings, and as such tools move from emergency arrangements to normalized mechanisms, the market's policy reserves for responding to risks and challenges will become more ample. Sinolink Chief Economist Song Xuetao places more emphasis on long-term mechanism building. He said the expansion of the Swap Facility can improve the asset liquidity of securities, fund, and other institutions and enhance their ability to obtain funds and allocate stocks countercyclically; the conversion of repurchase and increased-holding relending into a long-term institutional arrangement and the further reduction of funding costs will help encourage listed companies and major shareholders to continue repurchasing and increasing holdings. The two tools complement each other, which can improve market liquidity and alleviate irrational fluctuations in the short term, and also help gradually establish a more stable and sustainable market funding supply mechanism. This article is reprinted from "Cailian Press," edited by GMTEight: Liu Jiayin.