Source: Brokerage China

Near the close of the A-shares market, China International Capital Corporation under Central Huijin $China International Capital Corporation (601995.SH)$ and $China Galaxy (601881.SH)$ both hit the daily limit. $Western (002673.SZ)$ Increased by over 8%. $Cinda (601059.SH)$ Increased by over 6%.

In the Hong Kong stock market, $CGS (06881.HK)$ 、 $CICC (03908.HK)$ Once rose nearly 20%, now up more than 16% and 15% respectively; $CSC (06066.HK)$ Up nearly 9%, $CMSC (06099.HK)$ Up nearly 8%.

Analysts believe that the unusual movement of the major brokerages related to a rumor. There are market reports that China International Capital Corporation will merge with its peer China Galaxy, creating a brokerage giant with an asset scale of 193 billion dollars. Previously, there have been multiple rumors about the merger of the two major brokerages, but the companies have denied them.

In response, reporters from Brokerage China contacted the investor relations office and public relations department of China International Capital Corporation, but received no response. The public relations department of Galaxy Securities also did not respond.

Suddenly surging.

This afternoon, brokerage stocks suddenly surged, with China International Capital Corporation and China Galaxy both rising significantly, currently up over 15% and 16% respectively. Furthermore, driven by these two companies, CSC, China Merchants, and Orient also experienced substantial gains.

This sudden movement in brokerage stocks is related to a rumor about a merger in the brokerage industry.

On February 14, the China International Capital Corporation, CHINA CINDA, Orient Assets, and Great Wall Assets released announcements stating that shareholders planned to transfer their shares to Central Huijin. After the transfer is completed, Central Huijin will hold 58%, 72%, and 74% of the total issued shares of CHINA CINDA, Orient Assets, and Great Wall Assets, respectively, becoming their controlling shareholder. On the same day, Cinda Securities and Dongxing both issued announcements stating that after the transfer is completed, the actual controllers of the two companies will change from the Ministry of Finance to Central Huijin. Central Huijin actually controls several brokerages, including China International Capital Corporation, China Galaxy, SWHY, Cinda Securities, Dongxing Securities, and Great Wall Guorui Securities. Previously, Sinolink believed that expectations for brokerage mergers and acquisitions have increased, suggesting to pay attention to future merger opportunities among brokerages under the same actual controller.

In fact, since the beginning of spring, market trading activity has significantly increased, with the average daily trading volume of A-shares in February reaching around 1.7 trillion, an increase of 41.0% compared to January. The average daily trading volume from January to February also saw a substantial year-on-year increase of 64.1%. As of the latest data, the financing balance of A-shares has exceeded 1.8 trillion yuan, with cumulative inflow of leveraged funds exceeding 80 billion yuan after the holiday. Recently, the daily trading volume of A-shares even surpassed 2.2 trillion yuan.

Additionally, the first batch of Star Index ETFs was issued on February 17, expected to bring over 20 billion yuan in incremental funds to the Star Market. Yongxing Securities believes that with monetary easing and the introduction of medium and long-term funds, the market is likely to maintain a high level of activity, which will enhance the profitability of the brokerage sector. It is anticipated that brokerage and equity self-operated businesses may represent the largest improvement in performance for brokerages in the first quarter of this year. These factors provide the basis for the re-evaluation of brokerage stocks.

The atmosphere for making profits is gradually intensifying.

Driven by brokerage stocks, the SSE Composite Index rose by 1.02% today, while the Chinext Price Index increased by 1.23%. Sectors such as Steel, Real Estate, Semiconductors, Photovoltaic, Lithium Battery, and Auto Parts had significant gains, and Robot Concept stocks were frequently active. The market trading volume approached 2 trillion yuan, with over 4,200 stocks rising. The number of stocks in a bullish trend has also continued to surge over the past few trading days, surpassing the 3,000 mark.

Analysts believe that the unusual movement of brokerage stocks can be viewed as a significant signal for the upward breakout of A-shares. More importantly, this unusual movement did not cause other stocks to plunge, which indicates abundant market funds on one hand, and shows that long positions already established are confident.

Soon it will be time for the Two Sessions. In the short term, China Merchants Securities stated that from past experience, the market generally rises before the Two Sessions, with slightly weaker performance during the meetings and the following week, especially for Large Cap stocks. However, the market tends to strengthen again two weeks later, and major indices generally rise in the month following the meetings. Industries with strong growth attributes, such as Computer, are likely to achieve excess returns after the Two Sessions, while traditional industries perform poorly.

Hualong Securities believes that expectations for policy easing are strong, and fundamental expectations will further improve. Policies are guiding medium and long-term funds into the market, with trading volume also clearly recovering recently, which will generally stabilize market expectations. The recent phase of adjustment may provide a good opportunity for future layouts. Based on the historical trend of price fluctuations in the first five trading days before the Two Sessions, combined with recent market hotspots, the focus mainly revolves around new forms of productivity.

编辑/jayden