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<Research>UBS Envisions CN Brokers to Hail Catalysts; Top Picks CITIC, HTSC
Recommend 61 Positive 52 Negative 44 |
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On the back of the introduction of macro and capital market policies, Chinese A-share brokers leapfrogged before the long National Day holiday ended, UBS said in a research report. The sustainability of the uptrend in the mainland securities industry hinges on a number of catalysts, including the abundance of liquidity, support from macro policies and signs of economic improvement, as well as favorable policies. At this juncture, most of the criteria have been met, except for the question of whether the economy is picking up. Since the recent market rebound started from a relatively low base, it likely suggests a higher rally % this time. The broker believed that the valuation of A-share brokers is still relatively undemanding, but the valuation of H-shares is not compared with the historical average valuation. In UBS view, there are a number of catalysts emerging in the mainland securities industry, including 1) macro: cuts of RRR, interest rates and rates on existing mortgages; 2) capital market: the establishment of market value management guidelines, support for share buybacks and attracting long-term capital into the stock market; 3) sector: industry MA&s may accelerate, improving the competitive landscape. Among brokers, UBS’ top picks are CITIC SEC (06030.HK) and HTSC (06886.HK), both of which have a Buy rating on their H shares. AAStocks Financial News |
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