Chinese brokerages soak up gains as analysts expect industry to benefit from regulator’s ongoing reforms

New rules on refinancing, expansion of the options market and reforms of the ChiNext market are all conducive to the development of the brokerage industry, says Ma Tingting of Guosheng Securities

Among the 10 best performers on the CSI 300 Index over the past week, four are securities firms

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The outlook for Chinese brokerages looks positive after the regulator took a flurry of measures to reform the market. Photo: EPA-EFE

Published: 5:15pm, 17 Dec 2019Updated: 10:49pm, 17 Dec 2019

Shares of Chinese brokerages are leading the rally on the mainland on optimism the industry will benefit from a flurry of measures unveiled by the regulator to reform the market.

After the China Securities Regulatory Commission rolled out rules on Friday making refinancing and spin-off listings easier for listed companies and expanded the scope of derivatives trading, analysts are expecting more in the coming year.

“The financial regulation has entered an easing cycle, as there are lots of polices that are good for the capital market reforms,” said Ma Tingting, an analyst at Guosheng Securities. “The new rules on refinancing, expansion of the options market and reforms of the ChiNext market are all conducive to the development of the brokerage industry.”

Chinese brokerages are generally seen as a leading barometer of sentiment on the broader market, with a rally often preceding those in other sectors and signalling overall improvement in sentiment.

Among the 10 best performers on the CSI 300 Index over the past week, four are securities firms.

CSC Financial, ranked 12th in terms of total assets, and Tianfeng Securities, 36th on the list, according to the Securities Association of China, are the biggest gainers on the gauge, each rising at least 22 per cent.