CITIC Securities: Improving the capital market system and speeding up the construction of a financial power
The Zhitong Finance App learned that CITIC Securities released a research report saying that the foundation of the capital market system will continue to be improved to better serve the strategic direction of advancing the construction of a financial power during the “15th Five-Year Plan” period. The recent adjustment of risk factors for insurance stock investment by the General Administration of Financial Supervision and the Securities Regulatory Commission clarifying the direction of development and optimization of the brokerage industry are important signs of policy coordination. Focusing on the “15th Five-Year Plan” financial power strategy, the core function of the capital market to serve the real economy and cultivate new quality productivity will continue to be strengthened. A series of measures, such as entering the market for medium- to long-term capital, moderately opening up capital space for brokerage firms, and promoting differentiated and characteristic development, will consolidate the foundation of the market system and inject strong impetus into the construction of a strong financial nation.
Incidents:
On December 5, the General Administration of Financial Supervision recently issued the “Notice on Adjusting Risk Factors Related to Insurance Companies' Businesses”. The risk factors for insurance companies' investment in related stocks have been adjusted moderately. On December 6, Chairman Wu Qing of the Securities Regulatory Commission made it clear at the China Securities Association Conference that the brokerage industry will “moderately broaden capital space and leverage limits” and push the industry from “price competition” to “value competition.” In addition, it also emphasizes the integration of leading institutions and the characteristic development of small and medium-sized brokerage firms, and that classification supervision will be further optimized.
The foundation of the capital market system will continue to be improved to better serve the strategic direction of advancing the construction of a financial power during the “15th Five-Year Plan” period. The recent adjustment of risk factors for insurance stock investment by the General Administration of Financial Supervision and the Securities Regulatory Commission clarifying the direction of development and optimization of the brokerage industry are important signs of policy coordination.
The “15th Five-Year Plan” period is a critical stage for China to accelerate the construction of a financial power. The capital market is the core hub of the financial system, and its development is directly related to the process of building a strong financial country. In line with Chairman Wu Qing's speech, the capital market is anchored in a dual core mission: on the one hand, it must deeply connect with the transformation needs of the real economy, focus on the development of new quality productivity, and inject financial vitality into technological innovation and industrial upgrading through optimal resource allocation; on the other hand, it must adhere to an investor-centered orientation, enrich the supply of financial products, help optimize the allocation of residents' assets, and allow investors to share the fruits of economic development. The key driver to achieve this mission is to strive to build first-class investment banks and investment institutions. It not only requires leading institutions to play a leading role through integration and quality improvement, but also encourages small and medium-sized institutions to follow the path of characteristic and differentiated development, and comprehensively strengthen industry service functions by enhancing their professional capabilities in value discovery, risk pricing, and wealth management. The Financial Supervisory Authority recently lowered the risk factors for long-term stock investment by insurance companies, which is in line with the policy direction of the Securities Regulatory Commission to moderately broaden brokers' capital space and optimize leverage restrictions. It is a concrete reflection of the supervisory authorities creating a favorable institutional environment for the development of the industry. It is expected that financial resources will continue to serve national strategies and market needs more efficiently.
Securities: Chairman Wu Qing fully acknowledged the achievements of the securities industry in many areas, systematically explained the industry's “15th Five-Year Plan” development framework, and gave clear guidance on areas such as opening up capital space and leverage restrictions, promoting international capacity building, optimizing the leading role of leading companies through mergers, acquisitions and restructuring, promoting differentiated and characteristic development of the industry, and improving the regulatory requirements for key businesses.
CITIC Securities believes that during the “15th Five-Year Plan” period, the securities industry pattern is expected to be deeply reshaped, and 10 comprehensive institutions leading the development of the industry will gradually take shape. Securities companies are expected to achieve significant development through endogenous growth and mergers, acquisitions and restructuring, and asset allocation, comprehensive services, and internationalization capabilities are expected to be decisive factors in industry differentiation. Maintain the industry's “better than the market” rating. It is recommended to focus on two main lines of investment: 1) leading securities companies impacting world-class investment banks, and 2) medium and large securities companies with the potential to join the leading echelons.
Insurance: Develop patient capital and serve overseas strategies.
On December 5, the General Administration of Monetary Management issued a notice on adjusting risk factors related to insurance companies' business. The core contents include: the risk factors for the Shanghai and Shenzhen 300 Index constituent stocks and the China Securities Dividend Low Volatility 100 Index constituent stocks were lowered from 0.3 to 0.27; the risk factors for insurance companies' common stocks listed on the Science and Technology Innovation Board for more than two years were lowered from 0.4 to 0.36; insurance companies' export credit insurance business and the premium risk factor for China Export Credit Insurance Company's overseas investment insurance business was lowered from 0.467 to 0.42, reserve risk The factor was reduced from 0.605 to 0.545. On the one hand, the notice puts forward clear requirements for holding positions and reduces related risk factors, which is conducive to strengthening and expanding insurance patient capital, continuing to enter the market, holding positions for a long time, and stabilizing the market. On the other hand, the notice encourages insurance companies to increase their support for foreign trade enterprises and effectively serve the country's overseas strategy.
Insurance stocks have ushered in a period of significant opportunity. Banks continue to push down interest rates on deposits, reduce the supply of 3- and 5-year deposits, and promote the migration of savings funds to insurance companies at maturity. As a long-term fund, insurance is beneficial to meet the financing needs of physical stocks and bonds, promote the development of direct financing, and stabilize the capital market. At present, insurance companies have significantly increased their share holdings. This is highly compatible with the market environment where interest rates remain low and fluctuate and the stock market is gradually slowing down. Both the debt side and asset side of insurance companies are in a positive phase of the cycle, maintaining the industry's “better than the market” industry rating. In 2025, beta attributes have a comparative advantage. In 2026, it is recommended that stock selection pay more attention to insurance policy value ratios, new business value growth, and varieties with strong sustainability in profits and dividends.
Judging from market performance, before changes in domestic demand that exceeded expectations occurred, shocks and rotation of structural opportunities were the norm, and uncrowded highs and lows (such as insurance and brokerage firms) were also a viable option.
Since the “9.24 market” last year, the overall rise in the market level in both rounds has been accompanied by a systematic rise in the scale of financing, with a total net increase of 1.11 trillion yuan, far exceeding the total number of new subjective public and private equity products launched since October last year. In these two waves of the market, major broad-based and booming industries achieved the vast majority of gains. Current market shocks may be the norm before fundamentals change beyond expectations. Potential upward pressure on the renminbi in the future may bring about monetary easing that exceeds expectations. Monetary easing that exceeds expectations may drive real interest rates downward and leverage domestic demand to a certain extent (of course, this requires fiscal cooperation), and a systemic boost in domestic demand is a necessary condition for the overall market to break the turbulent impasse and take it to the next level in 2026. Prior to that, in terms of allocation, in addition to the two directions of continuing resources/traditional manufacturing pricing rights (non-ferrous, chemical, new energy, etc.) and enterprises going overseas (construction machinery, innovative drugs, power equipment, military industry, etc.), it is also recommended to pay close attention to the total volume and industry policy changes at the end of the year. From the perspective of high and low, types of transactions that are not crowded, such as insurance and brokerage firms, will also become an important direction for many capital rotation.