Changes in Hong Kong stocks | Increased gains in Chinese brokerage stocks, insurance capital is expected to continue to provide incremental growth to the equity market, and the loosening of high-quality institutions will help repair valuations

The Zhitong Finance App learned that the increase in Chinese brokerage stocks increased. As of press release, China Galaxy (06881) rose 5.17% to HK$10.57; Cathay Pacific Haitong (02611) rose 4.61% to HK$16.78; CITIC Securities (06030) rose 3.21% to HK$27.64; and GF Securities (01776) rose 2.58% to HK$17.49.

According to the news, the Financial Supervisory Commission issued a notice on adjusting risk factors related to insurance companies' business. Cathay Pacific Haitong pointed out that the Financial Supervisory Authority lowered the risk factors for long-term holdings of the Shanghai and Shenzhen 300, China Securities Low Dividend Constituent Stocks, and some Science and Technology Innovation Board stocks, reducing the capital consumption of insurance capital allocating high-quality equity assets and strengthening the trend of “long-term holding and enjoying capital benefits” without relaxing solvency restrictions. The minimum capital released this time is limited but the direction is clear, which is conducive to insurance capital to moderately increase the share of equity and extend the long-term holding period of positions. Combined with the medium- to long-term logic of “adding about 30% of premiums to enter the market”, we are still optimistic that insurance capital will continue to provide an increase in the equity market in the next few years.

Notably, Chairman Wu Qing of the Securities Regulatory Commission said that high-quality institutions will be appropriately “untied”, risk control indicators will be further optimized, capital space and leverage restrictions will be moderately opened, and capital utilization efficiency will be improved. According to the analysis of the Haitong Securities Research Report, the core of the “unbinding” policy for high-quality institutions proposed by Chairman Wu Qing is to push the securities industry's business logic from scale orientation to risk pricing capabilities, and from relying on license dividends to improving the level of professional management. This transformation will significantly benefit high-quality leading brokerage firms and become an important catalyst for sector valuation repair.