Why Did Brokerage Stocks Surge? Interpretation from Morgan Stanley
Driven by market recovery and policy dividends, brokerage stocks have performed strongly recently. Morgan Stanley analysts pointed out that H-shares and A-shares of brokerage stocks have risen 12.6% and 6.3% respectively in the past five days, significantly outperforming the market. The regulatory policy has shifted to support growth, the cleaning up of financial risks is basically complete, and market confidence has strengthened. The China Securities Regulatory Commission has recently expressed support for financing for technology companies and promoted multiple opening-up measures to further facilitate capital inflows and increase brokerage revenue
Under the dual impetus of market recovery and policy dividends, brokerage stocks have surged strongly.
According to news from the Chasing Wind Trading Platform, Morgan Stanley analyst Chiyao Huang and his team released a research report indicating that driven by the easing of global geopolitical uncertainties, increased trading activity in the Hong Kong market, and regulatory policies shifting towards growth, H-shares and A-shares of brokerage stocks have averaged increases of 12.6% and 6.3% respectively over the past five days, significantly outperforming the broader market.
The report states, the cleaning and digestion of financial risks are basically complete, and the financial system has returned to a prudent development track, which may usher in a new round of growth opportunities for the capital market.
Brokerage Stocks Perform Brightly, Outperforming the Market
The report shows that in the A-share market, the A-share brokerages covered by Morgan Stanley have averaged a 6.3% increase over the past five days, clearly surpassing the 2.2% increase of the CSI 300 Index, with East Money leading at an increase of 11.6%.
H-share brokerages have averaged a 12.6% increase over the past five days, with China International Capital Corporation leading at a 17.8% increase, achieving a total return rate of 45% year-to-date, indicating a significant increase in market confidence towards some leading brokerages.
Regulatory Signals Warm Up, Market Environment and Capital Flow Improve Together
The report points out that the China Securities Regulatory Commission (CSRC) has shown a tendency to promote growth in a series of recent statements and policy adjustments.
Recently, CSRC Chairman Wu Qing emphasized the use of the capital market to support financing for technology companies on multiple occasions and announced the reintroduction of listing rules for loss-making companies at the Lujiazui Forum.
In addition, the regulatory authorities have also promoted payment interconnectivity and a series of opening measures to support capital inflows into the Hong Kong market and encourage IPOs and private equity/venture capital in the consumer sector.
The report notes that these measures indicate a shift in regulatory policy towards a more relaxed and inclusive stance, injecting positive momentum into the capital market, especially the brokerage industry.
In addition to the positive signals from the regulatory level, there are multiple driving factors behind the rise of brokerage stocks.
The report points out that, firstly, recent easing of global geopolitical uncertainties has improved investor risk appetite.
Secondly, the consistently strong average daily trading volume (ADT) and IPO trading flow in the Hong Kong market provide revenue growth momentum for brokerages.
Moreover, the A-share IPO reforms are becoming more inclusive and diversified, with financing activities expected to accelerate, benefiting the investment banking business of brokerages.
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