Why did CICC and Galaxy become the "main characters of rumors" again after overnight announcements denying the merger?

On February 26, as the A-shares approached closing, CICC and China Galaxy both hit the daily limit.

In an instant, the merger rumors of the two brokerages resurfaced.

Market news indicated that the rumor of a "stock swap merger" became the catalyst for this late trading activity, similar rumors have emerged multiple times, also triggering price fluctuations for both brokerages.

As the market closed, Zhitongcaijing promptly contacted the public relations departments of CICC and China Galaxy, both sides "coincidentally" chose to remain silent at first, until late at night when both companies responded to investors in the form of official announcements.

For investors, why do the rumors of "CICC + Galaxy" always manage to stir market nerves? Why do funds always choose to "believe"?

What information do the announcements from CICC and Galaxy reveal?

Both Deny

On the evening of February 26, CICC was the first to disclose a clarification announcement:

As of the date of this announcement, the company has not received any written or verbal information regarding the above rumors from government departments, regulatory agencies, or company shareholders. After confirmation with the controlling shareholder Central Huijin, the controlling shareholder is not planning the matters referred to in the above rumors or any other significant matters involving the company that should be disclosed but have not been disclosed, and the company also has no information that should be disclosed but has not been disclosed.

Minutes later, China Galaxy issued the following announcement:

As of the date of this announcement, the company has not received any written or verbal information regarding the above rumors from government departments, regulatory agencies, or the company's controlling shareholders and actual controllers. After confirmation with the controlling shareholder China Galaxy Financial Holdings Co., Ltd. and the actual controller Central Huijin, the controlling shareholder and actual controller are not planning the matters referred to in the above rumors or any other significant matters involving the company that should be disclosed but have not been disclosed, and the company also has no information that should be disclosed but has not been disclosed.

Previous Rumors

Zhitongcaijing has found that the earliest rumors of a merger between CICC and Galaxy date back to November 13, 2023, when both parties stated in announcements that they had not received any written or verbal information from government departments, regulatory agencies, or company shareholders, and that the controlling shareholders were not planning the matters referred to in the above rumors.

In June 2024, rumors of a merger between the two brokerages resurfaced, and both public relations departments stated they were unaware and that everything would be based on announcements.

In July 2024, rumors again emerged that "CICC and Galaxy are merging, and Huijin has approved it," and both companies denied it once more.

However, after the two rumors in 2024, CICC and Galaxy did not clarify through announcements, primarily communicating through their external public relations departments.

Where Do Merger Rumors Come From?

By sorting through publicly available market information, Zhitongcaijing found that this series of rumor events has occurred multiple times since November 2023, and investors hold "expectations," which may be driven by the following factors:

First, high-level work meetings have clearly proposed "cultivating first-class investment banks," and the China Securities Regulatory Commission has repeatedly emphasized supporting leading brokerages in enhancing international competitiveness through mergers and acquisitions.

Second, frequent mergers and changes of ownership among brokerages: Guotai Junan and Haitong Securities merged and restructured, completing all administrative approval procedures in a "lightning speed" of 137 days; Zheshang Securities took over Guodu Securities; Western Securities acquired Guorong Securities; Guosheng Financial Holding absorbed and merged its wholly-owned subsidiary Guosheng Securities; Xinda Securities and Dongxing Securities changed their actual controllers to Central Huijin Thirdly, CICC and China Galaxy are both brokerages under Central Huijin. Recently, with the transfer of equity from China Cinda, Dongfang Asset, and Great Wall Asset to Huijin, the number of brokerages under Huijin has increased to eight, leading the market to believe that resource integration is necessary.

Fourthly, the two brokerages have complementary business characteristics. CICC has a clear advantage in cross-border investment banking, with outstanding wealth management capabilities serving high-end clients, while Galaxy Securities has a nationwide brokerage network and a larger base of individual investors. The two institutions can deeply collaborate to amplify their competitiveness.

Fifthly, there is a "two-way flow" of senior executives: Wang Sheng, the former head of the investment banking department at CICC, joined China Galaxy in 2022 as president and vice chairman of the executive committee, and was promoted to chairman in October 2023; in October 2023, Chen Liang, the former chairman of China Galaxy, took over as chairman of CICC