Chinese financial stocks saw a significant rise recently, with 9F (JFU, Financial) increasing over 20%, Gain Securities (GSIW) rising beyond 19%, and UP Fintech Holding (TIGR) gaining more than 7%. This surge follows the announcement from the People's Bank of China about the introduction of a swap facility for securities, funds, and insurance companies. This facility allows eligible firms to obtain liquidity from the central bank by pledging assets.
The head of the People's Bank of China, Pan Gongsheng, mentioned that the initial scale of the swap facility is 500 billion yuan, and the funds received must be invested in the stock market. UBS notes that brokerage stocks are likely to benefit from the macroeconomic support and capital market measures.
Additionally, China International Capital Corporation (CICC) highlights that the brokerage sector's performance, valuation, and holdings are currently at a low point. The recent reserve requirement ratio and interest rate cuts have provided market liquidity. Moreover, the creation of new policy tools is set to stimulate stock market development. CICC suggests that investors watch for opportunities arising from merger and acquisition sentiment, market improvements, and policy catalysts both internally and externally.
