HK Stock Market Move | Chinese-owned securities firms' stocks fell across the board in the morning session, and the decline in trading style led to a decrease in market risk appetite. Institutions believe that the valuation of securities firms does not reflect expectations of improved profitability.

In the morning session, Chinese-funded brokerages' stocks generally declined, as of the deadline, CMSC (06099) fell by 4.22% to HK$13.62; Guolian (01456) fell by 2.98% to HK$3.91; EB SECURITIES (06178) fell by 2.06% to HK$7.12; China Securities Co., Ltd. (06066) fell by 1.94% to HK$9.09. Jianghai Securities pointed out that the market in the past week has shown a trend of accelerated decline, with the Wind A-share index down by 7.00%. The decline in trading style dragging down the preference for risk capital may be a more important reason for the current market adjustment. The bank believes that the continuous adjustment of trading styles is mainly due to the accumulation of profits since September, and there is a greater pressure from potential profit-taking. In addition, with January approaching, the peak period for 2024 annual performance forecasts, the bank believes that the market may also worry about the risk of profit warning for performance-lagging stocks mainly in the small and micro-cap category, which is another reason for the recent adjustment in trading styles. From this perspective, small and micro-cap stocks may still have the potential for further risk release. In addition, according to the Shanghai Stock Exchange, the number of new A-share accounts opened in December 2024 was 1.989 million, a decrease of 26% month-on-month and an increase of 75% year-on-year. The total number of new account openings in 2024 was 25 million, an increase of 17% year-on-year. Open Source Securities pointed out that although the number of new account openings in December fell month-on-month, the year-on-year increase was still high, and attention should be paid to the increase in market turnover and turnover rate. The bank stated that traditional brokerage valuations are still low, and have not fully reflected the expectations of profit improvement in 2024 and 2025. The announcement of the 2024 performance forecast by brokerages in January 2025 may become a catalyst for the sector.