JPMorgan released a research report stating a change in stance towards csi China mainland financials index, with a preference for CM Bank (03968) and Ping An Bank (000001.SZ). Based on high dividends, they can provide downside support in disappointing market conditions, and significant upward revision in earnings per share forecast in case of exceeding expectations. They also prefer brokerages and mainland insurance companies, and lastly, large state-owned banks.

The report mentioned that yesterday in mainland, the Ministry of Finance announced the date and time of a press conference, but the sh&sz index continued to decline, reflecting the market's expectation downgrade of the fiscal stimulus scale from over 10 trillion yuan to 2-3 trillion yuan. The report pointed out that if the stimulus scale is between 2 to 3 trillion yuan, it would partially support consumer spending and imply the possibility of more stimulus policies when needed, which is believed to exceed market expectations.

The bank expressed a positive view on the record-breaking surge in financing on Tuesday, stating that it indicates strong resilience in retail investor sentiment, although the absolute leverage level remains low. The bank also sees improvement in expectations management by mainland government departments. If the trend continues and investors acknowledge this shift, it will reduce the market's risk premium in the long run.