On October 5th, Caixin reported that during the National Day holiday, the substantial rise in Hong Kong stocks led to a significant narrowing of the premium of AH stocks for brokerage.

From October 2nd to 4th, the Hong Kong brokerage sector rose by an average of 52.24% over 3 trading days. $SWHYHK (00218.HK)$ Range surged by 219.28%, $CMSC (06099.HK)$ and increased by 121.43%; multiple brokerage stocks had huge trading volumes. $CITIC SEC (06030.HK)$ Trading volume reached 10.181 billion Hong Kong dollars over the course of 3 trading days. $CICC (03908.HK)$Please use your Futubull account to access the feature.$CGS (06881.HK)$ They traded 6.142 billion Hong Kong dollars and 4.891 billion Hong Kong dollars respectively; the turnover ratio remains high, with the highest being $SWHYHK (00218.HK)$ （26.36%）、 $GUOLIAN SEC (01456.HK)$ （22.12%）、 $CMSC (06099.HK)$ （19.48%）、 $DFZQ (03958.HK)$ （19.04%）。

The premium of brokerage stocks A/H has significantly narrowed. The current average premium rate of brokerage stocks is 71.63%, a decrease of 78.56 percentage points from the previous period. The number of brokerage stocks with a premium rate exceeding 1 time has decreased from 11 to 4. Huatai Securities A shares have a premium rate of -1.64%, while Citic Securities and China Merchants Securities are only at 8.08% and 6.76% respectively.

Hong Kong brokerage stocks have surged by more than 50% on average over the past 3 trading days.

As of October 5th, during the National Day holiday, Hong Kong stocks have traded for 3 trading days on October 2nd, 3rd, and 4th. The average range increase of 22 Hong Kong brokerage stocks reached 52.24%, the average range amplitude was 73.68%, the average turnover ratio in the range reached 11.44%, with a total cumulative turnover of 41.963 billion Hong Kong dollars over the 3 trading days.

The top 10 Hong Kong brokerage firms with high price increases in the last 3 trading days are swhyhk (219.28%), China Merchants (121.43%), $CC SECURITIES (01375.HK)$ (76.4%), Guolian Securities (68%), $SWHY (06806.HK)$ （60.98%）、 $CSC (06066.HK)$ （58.82%）、 $HTSC (06886.HK)$ （58.15%）、 $BOCOM INTL (03329.HK)$ （52.54%）、 $DFZQ (03958.HK)$ （50.7%）、 $EB SECURITIES (06178.HK)$ （45.43%）。

In addition, among other AH stocks listed in both places, the performance of brokerage institutions includes China International Capital Corporation (42.88%). $CGS (06881.HK)$ （40.22%）、 $GF SEC (01776.HK)$ (38.78%), China International Capital Corporation (35.52%).

China International Capital Corporation has the highest trading volume, with a total turnover of 10.181 billion Hong Kong dollars over three trading days. Other Hong Kong brokerage firms with significant turnover include China Galaxy (6.142 billion Hong Kong dollars), Central China (4.891 billion Hong Kong dollars), China Merchants (4.22 billion Hong Kong dollars), and HTSC (3.483 billion Hong Kong dollars).

SWhyHK has been repeatedly speculated in the market, with a high turnover ratio during the three trading days reaching 26.36%; others with relatively high turnover ratios are China Galaxy (22.12%), China Merchants (19.48%), Orient (19.04%), China International Capital Corporation (18.05%), China Securities Co., Ltd. (18.01%), SWhy (17%), Everbright (14.83%), Citic Securities (14.61%), China Galaxy (14.33%), HTSC (11.66%), Guotai Junan International (9.49%), CC Securities (9.47%), and GF Securities (8.3%). $GUOLIAN SEC (01456.HK)$ (22.12%), China Merchants (19.48%), Orient (19.04%), China International Capital Corporation (18.05%), China Securities Co., Ltd. (18.01%), SWhy (17%), Everbright (14.83%), Citic Securities (14.61%), China Galaxy (14.33%), HTSC (11.66%), Guotai Junan International (9.49%), CC Securities (9.47%), and GF Securities (8.3%).

HTSC's Hong Kong stock price has surpassed its A-share price.

After three consecutive trading days of significant gains in Hong Kong stocks, the premium ratio of brokerage stocks A/H shares has narrowed significantly.

Based on the latest closing prices of AH, the average premium ratio of the A-share of 14 brokerage stocks is 71.63%, a decrease of 78.56 percentage points from September 30. The average premium ratio at that time was 150.19%.

Currently, only 4 brokerage stocks have a premium ratio of A shares exceeding 1 time, compared to 11 exceeding 1 time on September 30, with as many as 4 exceeding 2 times.

HTSC's A-share premium ratio is negative, at -1.64%. With the Hong Kong stock closing price on October 4 at 19.8 Hong Kong dollars, equivalent to 17.89 RMB, while HTSC's A-share closing price on September 30 was 17.6 RMB. In addition, the A-share premium ratios of Citic Securities and China Merchants Securities are also relatively low, at 8.08% and 6.76%, respectively.

The turnaround in premium ratios of the above three brokerage firms is particularly prominent. The premium ratios of these three brokerage firms based on the Hong Kong stock closing prices on September 30 were 19.61%, 93.05%, and 27.04%, respectively.

Currently, the top ten brokerage firms in terms of premium ratios are $HAITONG SEC (06837.HK)$ (167.57%), China International Capital Corporation (115.14%), China Securities Co.,Ltd. (111.70%), Guotai Junan (105.76%), Guolian Securities (94.97%), Swhy (91.81%), Everbright (80.83%), Central China (68.10%), China Galaxy (67.29%), Orient (62.84%).

Sell-side research: The market's reflexivity strengthens the logic of increasing trading volume.

Tianfeng Securities' research report believes that with the market sentiment improving, clients' willingness to open accounts has significantly increased. The daily average number of account openings has surged, online account openings are queuing up. At the same time, the activity of dormant clients has noticeably increased compared to earlier this month, and both individual and institutional clients show a strong willingness to enter the market. From the perspective of trading volume, client trading sentiment is fervent. The logic of "increased market trading activity and improved brokerage fundamentals" quickly gains market acceptance. The brokerage sector's logic deduction speed exceeds expectations, interpreting the fundamental market trends ahead of time. Under the influence of reflexivity, the intensity and speed of market interpretation may exceed market expectations, suggesting attention to top brokerage firms.

Market reflexivity refers to the mutual influence of market participants' views and behaviors, forming a self-reinforcing feedback mechanism. This reflexivity is more easily reflected in the brokerage sector, creating a self-positive feedback mechanism of "market trading volume amplifies -> brokerage fundamentals improve, investing in the brokerage sector -> market trading volume further enlarges".

Futu Securities Research Report believes that the policy combination of stable growth and a stable stock market exceeds expectations, with the market trading volume expected to continue to expand. Coupled with a low base, it is expected that the performance of listed brokerages in the second half of the year will significantly improve year-on-year. Bullish on high BETA Elastic Internet-related brokerages (Financial IT) symbols, bullish on Orient Securities with outstanding wealth management advantages and still low valuations, bullish on the M&A theme and undervalued top brokerages.

Editor/Somer