Citic leads brokers rally as China seeks to further open markets

Citic Securities Co. jumped to a two-month high as brokerages advanced after China’s securities regulator said it will do more to open mainland financial markets.
Citic rose 7 percent to HKD29 at the midday break in Hong Kong, set for the highest close since Jan. 15. Haitong Securities Co. gained 6 percent to HKD19.04. The China Securities Regulatory Commission is focusing on implementing previously-announced measures allowing companies from Hong Kong and Macau to enter China’s securities industry, it said Friday. The regulator also expanded the number of fund-management firms eligible to buy Hong Kong stocks through the Shanghai link.
“A further opening up of mainland markets should help boost trading flows between China and Hong Kong,” Castor Pang, Core Pacific-Yamaichi Hong Kong’s head of research, said by phone. “This will improve the business of brokerages with operations in both China and Hong Kong.”
Mainland and Hong Kong equities jumped yesterday after China’s central bank governor said that economic growth had slowed too much and that there was scope for additional easing. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong surged 3.4 percent, poised for the highest close in more than three years.
Hong Kong Exchanges & Clearing Ltd. advanced 4.8 percent to HK$187.40. Mainland investment in Hong Kong stocks via the Shanghai bourse link increased ysterday after the CSRC said money managers no longer need to be part of the Qualified Domestic Institutional Investor program to use the exchange connect. Investors used 1.6 billion yuan (USD260 million) of the 10.5 billion yuan daily quota as of the lunch break, the most since Jan. 5, according to exchange data compiled by Bloomberg.
Mainland investors had bought a net 30.6 billion yuan ($4.9 billion) of Hong Kong shares as of March 27, or 12 percent of the available aggregate quota, since cross-border trading debuted on Nov. 17.
China also raised an investment limit for a foreign fund- management company to a level that exceeded a previously announced cap last week, signaling a relaxation that would broaden access to its capital markets. Jonathan Burgos, Bloomberg