Public REITs increased by more than 40% in the year

2022-06-02 0 By

At the same time, the three major a-share indexes suffered heavy losses, public REITs have performed bright.On Feb. 16, Wells Capital Water set another all-time high, up 45.27% year-to-date, leading the advance in publicly offered REITs.As a kind of fixed income products, but out of the equity market also magnificent market.In a closer look at the reasons behind this, we find that the infrastructure sector has surged since the beginning of this year, while the underlying assets of the first batch of publicly offered REITs are infrastructure, which naturally benefits.The second is the poor equity market, resulting in a high risk aversion of funds, into the public offering of REITs, greatly pushing up their net worth.The rise of many publicly offered REITs has also brought bumper returns to insurers, banks and brokerages that invested in them earlier.In 2022, the three major indexes all fell. From the beginning of the year to the 18th, the Shanghai Composite Index fell 4.09%, the CSI 300 index fell 5.85%, and the GEM index fell 14.92%.Under the drag of the index, all kinds of asset management products have retreated substantially, more than 10 billion private fund products fell below the warning line.Under the howling, public REITs have steadily risen across the line, out of the “unique” market.REITs stand for real estate investment trusts.But instead of stocks and bonds, public REITs invest in real estate, and they are specially treated (securitisation, or ABS).The underlying assets of its products are infrastructure, including public environmental protection, industrial parks, highways, warehousing and logistics.According to Choice data: from the beginning of the year to the 18th, the first water REIT in Rich Country increased by 42.71%;The REIT of Laterite Yantian Port rose 30.82% in the year;Boshi Shekou Industrial Park REIT rose 26.06%;Soochow Suyuan Industrial REIT, Building credit Zhongguancun REIT rose in more than 10%, the rest of the several REITs have varying degrees of increase.As the underlying asset is infrastructure REITs, this year’s surge on the one hand due to the strong infrastructure sector since the beginning of the year;On the other hand, it benefits from its stable yield.First of all, the sector is strong. Since the beginning of the year, infrastructure investment has been the main line of the market and continues to get attention from funds.Flush data shows that the infrastructure index has risen by 20.82% so far this year, and some stocks in the plate have risen by more than 50%.On the other hand, REITs, as a new class of asset allocation varieties, have investment risks between stocks and bonds and higher returns than general financial products and fixed income products.At the same time, according to the regulatory requirements, on the premise of meeting the allocation conditions, the public offering of REITs should not be less than once a year. More than 90% of the annual allocation amount of infrastructure funds can be allocated to investors, which is also trusted by investors for its “stable” attribute, which is another reason for the sharp rise in the public offering of REITs.In addition, the stock market has not performed well after the Spring Festival, and the public offering of REITs has become a risk-averse choice for some investors.The entry of capital will push up the price of REITs, and the strong trend will attract investors to enter, forming a positive feedback between the two.It is worth noting that the current floating share of REITs is about 10 billion yuan, and the available trading surface is small, vulnerable to the impact of speculative funds.Insurance capital, bank wealth management, brokerage asset management into the biggest winner of the rising net value of REITs, naturally let early investors make a lot of money.Whether it is the first batch or the second batch, the “stable” property of public REITs has become the hot property of insurance capital, bank finance, and securities asset management.Among them, insurance capital becomes the main force of allocation.Eight REITs have made an appearance.China insurance investment fund appeared in China Yuexiu High-speed REIT, Rich country first water REIT, Zheshang Shanghai Hangyong REIT, Zhongjin Pross REIT, Soochow Suyuan Industrial REIT top ten fund share holders in the list, holding shares of 7.5 million, 6 million, 10.51 million, 26.7 million, 16.2 million, respectively,The allotment proportion is no more than 5%.The top three partners of China Insurance Investment Fund are Shanghai Pudong Development Group, Citic Prudential Life Insurance Company and Taiping Asset Management Co., LTD., holding 10.21%, 7.11% and 5.59% respectively, with China Insurance Investment Co., LTD as the partner.Insurance capital giant Taikang Life insurance appeared in the red earth Yantian Port REIT, China Aviation Shugang Green REIT, Zhongjin Prolos REIT’s top ten fund share holders in the list, holding shares are 56 million, 5.5 million, 300 million.Ping an Life Has also successfully become the strategic investor of Ping An Guangzhou Guanghe REIT, holding 69.3 million shares, accounting for 9.94% of the market share;Life insurance and Pacific Property Insurance appeared in the list of the top ten fund share holders of Boshey Shekou Industrial Park REIT, holding shares of 13.38 million shares, holding a ratio of 1.55%.In addition, life insurance also became the eighth largest REIT fund share holder with 16.94 million shares.Taiping Life Insurance, Citic Prudential Life Insurance and New China Life Insurance all hold 6.89 million shares of CCB Zhongguancun REIT fund, accounting for 0.77%.”For securities companies, the public offering of REITs not only means a vast blue ocean of new business to be explored, but also opens up a differentiated competition track outside the traditional investment banking and asset management businesses such as stocks and bonds.”Deng Guoshan, managing director of first Capital Securities and head of the structured Products department, commented on publicly offered REITs.Perhaps because of this, a number of large brokerages jumped the gun and jockeyed for position when the two public REITs were issued.Among them, Guangfa Securities is a “large investor” in REITs, holding fund shares in 7 REITs, which are Ping an Guangzhou Guanghe REIT, Boshi Shekou Industrial Park REIT, Red Earth Yantian Port REIT, Hua ‘an Zhangjiang Vast REIT, Soochow Suyuan Industrial REIT, Rich country first water REIT, China Aviation Shougang Green ENERGY REIT,The fund shares held were 22.47 million, 13.38 million, 17.7 million, 16.94 million, 46.71 million, 5.36 million and 3.22 million, respectively.Guotai Junan Securities in Peace Guangzhou Guanghe REIT, Bo Shi Shekou Industrial park REIT, Red earth Yantian Port REIT, Soochow Suyuan industrial REIT, Zhongjin Pross REIT, rich country first water REIT 6 REITs top ten fund holders in the list,The number of shares held was 22.47 million, 13.38 million, 17.7 million, 41.52 million, 22.43 million and 5.36 million, respectively.Galaxy Securities holds fund shares in 5 REITs, which are Ping an Guangzhou Guanghe REIT, Soochow Suyuan Industrial REIT, Fuguo First water REIT, Zhejiang Shanghai Hangyong REIT, AvIC Shougang Green ENERGY REIT, Huaxia Yuexiu High-speed REIT,Its fund shares are 16.57 million, 26.47 million, 86.88 million, 3.95 million and 14.83 million, respectively.Dongxing Securities appeared in ping an Guangzhou Guanghe REIT, Bo Shi Shekou Industrial Park REIT, Zheshang Huhangyong REIT 3 REITs in the list of top ten fund holding shares, its holding fund shares were 25.65 million, 13.38 million, 14.41 million.In addition to insurance capital and brokerage, bank financial management as a representative of solid +, naturally can not be absent from this capital feast.Before and after the launch of the first nine public REITs, banks participated in the first batch of public REITs through strategic placement, fund trustee, commission sale, subscription, etc.In particular, strategic placement and subscription, banks and financial companies are involved.Zhang Min, vice President of China Construction Bank, said at the 2021 Meeting of China REITs Forum that CCB’s financial management subsidiary, CCB Financial Management, participated in 8 infrastructure public REITs investment, with a total subscription amount of more than 3.2 billion yuan and the final allocation amount of 520 million yuan.In the market, it is the financial company that has the largest volume of online inquiry for the first batch of projects, the largest number of participants, and has a greater impact on the price of the issue.In terms of custodians, the fund trustees of the first nine publicly offered REITs products include China Merchants Bank, Industrial and Commercial Bank of China and Industrial Bank of China;On commission sales, there are China Merchants Bank, Industrial Bank, Ping an Bank, Pudong Development Bank, Bank of Beijing, Huaxia Bank, etc.Overheated REITs overdraw short-term intrinsic value of short-term REITs also overdraw its intrinsic value too quickly, resulting in the accumulation of risks.The income sources of public REITs are divided into two parts, that is, mandatory annual dividend and capital gains at secondary market prices.As secondary prices rise, dividends from public REITs will be diluted.If the price of the secondary market fluctuates sharply, especially when the price rises sharply to significantly higher than the intrinsic value of public REITs, investors will face two risks: first, in the long run, the price will return to the intrinsic value, and there will be the risk of investment loss due to the price decline;Second, due to the price rise, the actual net cash flow distribution rate of investors is reduced, and the expected investment objectives cannot be achieved.And many REITs funds have also issued prompt risk announcements.As early as Feb. 9, when the pharmaceutical and new energy sectors suffered a sharp decline, some of the REITs that had risen too quickly issued a trading risk warning.On the same day, red earth Yantian Port REIT, rich country first water REIT two funds issued suspension and resumption of trading and trading risk tips notice.The announcement said: ‘Because of the closing price compared to the issue price accumulated higher, in order to protect the interests of investors, temporarily suspended trading for one day.’14 evening, Boshi Shekou Industrial park REIT issued a suspension notice, for the reason of the suspension, the announcement content shows: the fund in the secondary market closing price of 3.646 yuan, compared with the issue price of 2.310 yuan higher cumulative rise.The main cash flow of the fund is income from basic projects such as rent.As the transaction price increases significantly, the net cash flow distribution ratio will decrease significantly.In order to protect the interests of fund share holders, trading resumed at 10:30 on February 15, 2022.But even if issued a suspension notice, Boshi Shekou Park REIT still continued the past rally.Coincident, CCB Zhongguancun REIT, Hua ‘an Zhang Jiang Everbright REIT also followed followed by a reminder of the risk announcement and even suspension announcement, suspension reasons and the above REIEs fund said the same.In addition, some analysis said: public REITs are not necessarily free of risks, and the risks mainly come from the profits of the underlying assets. Once the underlying assets meet the “black swan”, the failure to reach the expected returns will cause losses to investors.Responsibility to edit | Chen