Citigroup: Favorable policies and increased investor confidence may drive the SSE Index to break through 3,500 points
Citigroup analysts stated that driven by favorable policies and increased investor confidence, the Shanghai Composite Index is expected to break through 3,500 points. External factors such as expectations of interest rate cuts by the Federal Reserve and easing geopolitical risks have also boosted market sentiment. The Chinese government is encouraging the shift of household assets towards stock allocation by reducing transaction costs and optimizing capital market rules, thereby activating market vitality. The policy dividends will expand the business space for investment banking and wealth management, and the performance of brokerage stocks is expected to improve. Citigroup has upgraded its rating on Chinese stocks to "Overweight," believing that 2025 will be a turning point year for the Chinese economy
According to the Zhitong Finance APP, analysts from Citigroup recently released a report indicating that, driven by favorable policies (such as financial reforms and liquidity support measures) and enhanced investor confidence, the Shanghai Composite Index is expected to break through the recent high of 3,500 points. Citigroup analysts pointed out that external factors such as expectations of interest rate cuts by the Federal Reserve and easing geopolitical risks have further boosted market sentiment, providing support for upward movement.
The report emphasizes that the Chinese government is encouraging households to shift their assets from savings to stock allocations through various policies (such as reducing transaction costs and optimizing capital market rules) to activate market vitality and hedge against a low-interest-rate environment. This trend is seen as a structural change that may accelerate the transfer of household deposits to equity assets.
Policy dividends will expand the business space for investment banking, wealth management, and mergers and acquisitions, with leading brokerages such as CITIC Securities (600030.SH) and Huatai Securities (601688.SH) being more resilient due to technological empowerment and international layout. Historical market trends show that policy-driven bull market cycles often significantly enhance the performance of brokerage stocks, and the current environment is similar to the structural opportunities seen in 2014-2015 and 2019-2021.
In April 2025, Citigroup raised its rating on Chinese stocks to "overweight," believing that 2025 will be a turning point for the Chinese economy, with technological innovations (such as breakthroughs from DeepSeek) stimulating a repricing of Chinese assets and strengthening long-term growth expectations
