A-Shares 4-Day Uptrend

On September 23rd, the Shanghai Composite Index (SCI) rose by 0.44%, achieving a four-day winning streak.

Financial stocks showed a mixed performance, with bank stocks experiencing a rebound amidst fluctuations, while non-bank financials and diversified financials both saw declines.

Analysts believe that bank stocks were mainly influenced by market support, creating a seesaw effect between funds in securities firms and insurance companies versus bank stocks.

Recently, new risk control regulations for securities firms have been introduced, further relaxing the capital operation space for leading securities firms, with leverage levels and profitability expected to improve.

At the same time, the performance of the secondary market also indicates that the market's risk expectations for industry compliance still exist.

In the afternoon, bank stocks rebounded, with the sector rising by nearly 1.6%.

Huaxia Bank and Ningbo Bank saw gains exceeding 3%, followed by Chongqing Bank, Chengdu Bank, Bank of Beijing, CITIC Bank, and China Minsheng Bank.

On the news front, during his attendance at the second China-Portuguese Speaking Countries Central Banks and Financiers Meeting, People's Bank of China Governor Pan Gongsheng stated that China's economy is growing steadily.

The People's Bank of China will continue to adhere to a supportive monetary policy stance, intensify monetary policy adjustments, and improve the precision of monetary policy to create a favorable monetary and financial environment for the stable growth and high-quality development of the Chinese economy.

Regarding the performance of bank stocks rising and securities and insurance stocks falling today, independent financial commentator Guo Shi Liang told the International Finance News reporter that bank stocks were mainly influenced by market support, creating a seesaw effect between funds in securities firms and insurance companies versus bank stocks.

This year, bank stocks have shown a good trend.

According to statistics from Wind Information, among the 42 banks listed on the A-share market, more than 80% of the stocks have risen within the year, with 13 banks' gains exceeding 20%.

China Galaxy Securities Research Report stated that the financial "water squeezing" and the management of idle capital continue, with credit allocation slowing down and improving quality, the rhythm becoming more balanced, the total amount maintaining reasonable growth, and government bonds supporting social financing.

The central bank proposed to introduce incremental policies to further reduce corporate financing and consumer credit costs, more targeted to meet reasonable consumer financing needs, reflecting the direction of promoting consumption and expanding domestic demand.

In the current environment of asset scarcity, the dividend value of the banking sector continues to be optimistic.

In addition, the insurance stocks closed lower overall, mainly dragged down by Tianmao Group with a decline of more than 6%, while China Life, China Pacific, New China Life, and PICC all rose by more than 1%.

The diversified financial sector saw the largest decline, with the sector falling by more than 1%, Hongye Futures hit the daily limit down, and Jiuding Investment fell by more than 4%.

On the news front, on September 18th, the Hunan Securities Regulatory Bureau issued a penalty to Hongye Futures Changsha branch and related responsible persons.

The branch was found to have employees providing convenience for customers' futures financing activities and receiving remuneration.

The Hunan Securities Regulatory Bureau decided to take supervisory measures to order rectification and record it into the securities and futures market integrity file.

Leading securities firms or securities stocks fell slightly, with more individual stocks falling than rising within the sector.

Jinlong Shares rose by nearly 3%, and Guoxin Securities rose by more than 1.4%, with the rest of the individual stocks fluctuating slightly.

On the news front, the China Securities Regulatory Commission recently revised and issued the "Securities Firms Risk Control Indicator Calculation Standard Provisions," which will officially come into effect on January 1, 2025.

In the view of industry insiders, the capital operation space for leading securities firms has been further relaxed, and the leverage level and profitability are expected to improve.

"The new adjustment of the securities firm risk control indicator calculation standard is mainly to support securities firms to improve capital space, enhance the vitality and initiative of securities firms, but the market did not respond much to this news, or there is still concern about the future upgrade of risk management, and compliance risks still exist," said Guo Shi Liang.

In 2016, the China Securities Regulatory Commission revised and issued the "Securities Firms Risk Control Indicator Management Measures" and supporting risk control indicator calculation standards.

For the "Securities Firms Risk Control Indicator Calculation Standard Provisions," the first revision was made in 2020, and the second revision was made in 2024.

Compared with the draft in November 2023, the formal draft of the calculation standard provisions mainly has five adjustments.

Donghai Securities non-bank analyst Tao Sheng Yu analyzed that three aspects are relaxed regulatory constraints, one is the calculation standard of risk capital preparation for some proprietary equity positions and market-making business was reduced, two is the optimization of the wide-based index discount rate in the liquidity coverage ratio indicator, three is the addition of available stable funds in the net stable funding ratio indicator; in addition, there are two aspects of regulatory tightening, one is the increase in the calculation standard of other non-standard assets in the asset management business and some off-exchange derivatives in the risk capital preparation, two is the increase in the conversion coefficient of off-balance-sheet asset management business.

High-quality leading securities firms will welcome good news.

Guojun non-bank Liu Xinqi team said that the new regulations optimize the risk control indicator calculation for securities firms' investment in stocks, market-making, and other businesses, and further highlight the classification supervision orientation, and leading securities firms with stable operations are expected to release more capital space.

Huaxiang Securities non-bank analyst Lv Xiuhua also believes that under the new regulations, the relaxation of capital constraints and the opening up of leverage cap space for high-rated securities firms will be beneficial for these securities firms to further improve their table level and profitability.

Looking at the current constraints of various regulatory indicators, the main indicators with larger constraints are risk capital preparation and net stable funding ratio, especially the net stable funding ratio indicator, many leading securities firms are close to the warning line, so the relaxation of this indicator has important practical significance.

It is recommended to pay attention to the leading securities firms that benefit significantly.