Since the beginning of this year, under the simultaneous interest rate hikes by Taiwan and the United States, financial stocks have performed relatively strongly, and market sentiment has also increased significantly. However, as financial stocks are getting higher and higher, empty-handed investors want to know that they can still enter financial stocks now. ? Which targets should be locked?
【arts/ Cai Minghan】
The war between Russia and Ukraine did not end as quickly as Russian President Vladimir Putin expected. With the support of NATO countries, Ukraine bravely resisted the Russian invasion. Although the economic shutdown of Russia and Ukraine had limited impact on the global economy, the war caused energy and metal prices to soar. The risk of stagnant inflation is heating up. Under the systemic risk, the global stock market fluctuates back, and funds flow out of growth stocks with high price-to-earnings ratios, resulting in relatively weak performance of electronic stocks, and capital flow to value stocks, guiding foreign investment in Taiwan stocks Continue to reduce the number of electronic groups and move towards non-electric groups.
Financial stocks are relatively strong
Among them, although the raw material group has benefited from the war, the price of raw materials has risen, but the price is already at a high level, and it is expected that the room for a sharp increase is limited, and if Russia and Ukraine reach a ceasefire agreement in the future, it is expected that the raw material group will decline. Therefore, electronic There is a seesaw effect with the raw material group, both of which have their own risks, and the stock price fluctuates greatly. In contrast, the financial group will not significantly increase the risk whether the war continues or stops, and attracts capital inflows in relative safety. , especially following the large withdrawal of foreign capital in the electronic group, the over-buying in the financial group is more significant. Under the advantage of capital flow, financial stocks are relatively strong.
After the epidemic in Europe and the United States gradually eased, the economic recovery led to an increase in animal prices. Later, due to the war in Russia and Ukraine, the U.S. consumer price index (CPI) reached 8.5%, a 41-year high. The Fed turned to a tightening pattern to suppress inflation , raised interest rates for the first time in mid-March, and recently continued to release actions to accelerate interest rate hikes and shrink balance sheets. Under the trend of capital tightening, most industries will be affected, but financial stocks have benefited once morest the trend. .
The profit of the insurance industry among the financial groups mainly comes from the interest rate difference between the return on investment of insurance funds and the predetermined interest rate of the insurance contract. Simply put, the return on investment of insurance premiums collected by insurance companies must be higher than the rate of return on investment that is promised to be given. Insurer’s remuneration.
However, most of insurance companies’ investments are in relatively stable bonds. Under the trend of interest rate cuts in the past few years, bond yields have fallen, and investment yields are lower than the predetermined interest rates of insurance contracts, resulting in negative interest spreads, which impact the company’s profits. With the net value, but under the cycle of interest rate hikes, bond yields will rebound, and the impact of negative interest rate spreads will also be greatly reduced.
The banking industry in the financial group has benefited more significantly, because the main source of bank profits comes from the interest rate difference between deposits and lending. Although the lending interest rate is always higher than the deposit interest rate, in a low interest environment of less than 1%, The interest rate spread on deposits has been compressed. If interest rates are raised in the future, the profit margins of banks will be expected to expand. In addition, the Fed will raise interest rates relatively quickly, which will attract funds to return to the United States. The dollar is expected to remain strong. Taiwan The foreign exchange loss caused by the strong Taiwan dollar in the financial industry in the past two years is expected to reverse and turn into a bullish exchange rate gain.
[Forthefullcontentpleasereferto”ExtraordinaryBusinessWeekly”2022/4/15No.1297]
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