Core view:
The regulators revised the Shanghai London Stock connect mechanism, broadened the scope of application and further opened the capital market to the outside world
The CSRC reported on December 17 that it plans to revise the regulatory provisions on the interconnection of depositary receipts business between Shanghai Stock Exchange and London Stock Exchange (for Trial Implementation) and solicit opinions from the public. The revised and improved contents mainly include broadening the scope of application and including qualified listed companies of Shenzhen Stock Exchange in the domestic aspect; Overseas, expand to Switzerland and Germany. Overseas issuers are allowed to raise funds and adopt market-oriented inquiry mechanism for pricing. Optimize the continuous supervision arrangements and make more optimized and flexible institutional arrangements for the continuous supervision of the disclosure contents of the annual report and the disclosure obligations of changes in equity.
Securities industry perspective
Recently, the average daily turnover of the two cities has returned to the normal level of trillion scale, with active transactions. From the perspective of supervision, the policy continues to be loose and good, providing a good development environment for the securities industry. In 2018, after experiencing the stage of large impairment losses caused by credit default events and the continuous downturn of the market, the securities industry began to repair its performance upward since 2019. In terms of policy, the timely RRR reduction signal proposed by the national high level recently is expected to stimulate the vitality of the overall financial sector, and then stimulate the valuation repair and upward of the securities sector.
At the current stage, we believe that the long-term benefits brought by the transformation of brokerage business to wealth management mode are the main performance growth point of the securities industry. The main reason is that residents' deposits are gradually changing from banks that bring low returns and liquidity to the stock market that can bring high returns and liquidity, which is superimposed on the expansion of the pilot fund investment adviser of securities companies and the gradual expansion of fund holdings, The outlook of the securities industry is rising. Affected by the tone of recent national conferences, the measures of reducing reserve requirements and interest rates and the traditional "year-end effect", the repair trend of the overall stock price of the securities industry has been started and is expected to continue to rise. In addition, the establishment of Beijing stock exchange will directly promote the growth trend of IPO business, and is expected to improve the activity of relevant business markets and continue to catalyze the performance of securities companies.
Risk statement
The implementation effect of the policy is less than expected, or even tightened, liquidity tightened, stock based turnover fell sharply, and the overall market downside risk.
