HK Stock Market Move | Chinese brokerage stocks rise in the morning; China Galaxy (06881) increases by more than 6%, CICC (03908) rises by more than 4%.

Chinese brokerage stocks rose in the morning, as of the time of writing, China Galaxy (06881) rose by 6.08% to 8.38 Hong Kong dollars; CICC (03908) rose by 4.2% to 15.38 Hong Kong dollars; CMSC (06099) rose by 3.31% to 14.96 Hong Kong dollars; CITIC SEC (06030) rose by 2.48% to 22.75 Hong Kong dollars. On the news front, in February of this year, the Ministry of Finance proposed to transfer some of the equity held by the three major AMC institutions to the Central Huijin for free. Huijin now owns 8 brokerage firms, and market expectations for mergers and acquisitions within the "Huijin group" are beginning to take shape. It is worth noting that there have been rumors in the market recently that the merger between Zhongjin and Galaxy Securities will be announced in the coming weeks, which were denied by both companies. Citi previously released a research report expressing doubts about the merger plan being announced in the coming weeks, mainly due to recent management changes at CICC; the transfer of equity in brokerage firms from the Ministry of Finance to Huijin is still ongoing, which may introduce complexity or delays to CICC's brokerage consolidation plan. However, Citi stated that the merger plan is feasible in the long term. Assuming a stock exchange ratio of 2.5:1, CICCA and H shares are expected to rise by approximately 10% and 30% respectively. Additionally, the bank is optimistic about China Galaxy, as potential merger synergies may increase its return on equity for shareholders, and it expects China Galaxy to outperform CICC in profitability in the fourth quarter of fiscal year 2024.