The “price war” of two financings is not new in the industry. Against the current downward trend in the overall interest rate of the industry, the decline in the interest rate of two financings has become an inevitable trend. However, many industry insiders clearly feel that the decline in financing interest rates seems to have accelerated in the past two years.

Taking the Chengdu market as an example, a person from the Chengdu region’s margin trading person told the Securities China reporter that since my country officially launched margin trading business in 2010, the market financing interest rate was initially the standard interest rate of 8.35%. During the bull market in 2015, some large-scale customers began to show sensitivity to financing interest rates, and the market interest rates dropped to about 7.5%. From 2019 to 2021, the interest rates of margin financing and margin financing of most securities firms remained stable in the range of 6.5%-7.5%. However, since 2022, the interest rate of the margin financing and margin market has quietly dropped to about 6%, and has fallen below the psychological threshold of 6% for the first time. By 2024, the average interest rate of leading brokerages will be about 6%, which can be reduced to below 4%, and this trend has accelerated since this year.

A person from a leading brokerage business department in Shanghai also pointed out that since the standard financing interest rate was 8.35%, the market financing interest rate was generally above 8% before 2015. By 2021 and 2022, the financing interest rate has dropped to 6%-7%. Today, the financing interest rates provided by some securities firms to newly opened high-net-worth customers have even dropped below 4%.

The person analyzed that the rapid decline in financing interest rates is due to the downward trend of the overall market interest rate, but the more important reason is that some securities companies attract customers by lowering financing interest rates. In the A-share market, investors can only open one margin financing account at most, which is different from the ordinary account that can open three. Therefore, it can attract two-way financing customers and basically lock in customers. After a brokerage attracts customers through a lower margin interest rate, although its FTP (internal capital transfer pricing) assessment may not be qualified, this strategy does not focus on current returns, but on the interest rate spread returns when interest rates continue to decline in the future.