HK Stock Market Move | The stock prices of domestic banks have all risen, with the banking sector fully in a state of breaking through net assets. Market value management guidelines bring opportunities for valuation reshaping.

Chinese banking stocks across the board rose. As of press time, Bank Of Zhengzhou (06198) rose by 8.08% to HK$1.07; China Minsheng Banking Corp., Ltd. (01988) rose by 6.14% to HK$3.11; CEB BANK (06818) rose by 4.15% to HK$2.76; Bank Of China (03988) rose by 3.32% to HK$3.73; Industrial and Commercial Bank of China (01398) rose by 2.83% to HK$4.73. In terms of news, the China Securities Regulatory Commission issued the "Regulatory Guidance No. 10 - Market Value Management" in a formal draft, with certain optimization adjustments in terms of system disclosure, long-term companies trading below value, index selection, regulatory measures, etc. Dongguan Securities pointed out that the banking sector is in a state of being below value, and the "guidelines" are expected to bring an opportunity for the banking sector to reshape valuation. In addition, a series of incremental financial policies recently introduced to support local debt risk resolution, help state-owned large commercial banks supplement core Tier 1 capital through issuing special national bonds, promote the stabilization and recovery of the real estate market, and introduce convenient swap tools have also provided substantial positive news for the banking sector. China Securities Co., Ltd. noted that after the release of a package of incremental economic and loose monetary policies, market pessimism has eased, economic recovery expectations have improved, and banking valuations have been adjusted under policy support. However, actual macroeconomic indicators are still in the process of gradual recovery, and the banking sector is in the context of "strong policy expectations, weak fundamentals". It is hoped that the current monetary and fiscal policy support will further drive economic recovery and lead to substantial improvement in the banking fundamentals.