Bull Market Flag Rises: Shanghai Index Reclaims 3900 Points! Boc International (China) Hits Limit-Up, Top Brokerage ETF (512000) Surges 3% Amid Persistent Underperformance

Deep News12-05 20:05

In the afternoon session, the "bull market flag bearer" brokerage sector surged sharply, boosting market sentiment and lifting the Shanghai Composite Index back above 3900 points. By the close, Boc International (China) Boc International (China) Co.,Ltd. (中银证券) hit the daily limit-up, while Industrial Securities rose over 5%, Xiangcai Co. and East Money Information gained over 4%, and Northeast Securities climbed more than 3%. East Money Information recorded a single-day turnover of RMB 12.685 billion, re-entering the "RMB 10 billion club" and ranking fourth in A-shares by trading volume.

Main funds flowed rapidly into the sector, with brokerage stocks attracting a net inflow of RMB 5.946 billion today, ranking fifth among all Shenwan secondary industries. Top beneficiaries included East Money Information, Boc International (China), and CITIC Securities.

Among popular ETFs, the RMB 39.3 billion heavyweight Brokerage ETF (512000) rallied sharply, with its intraday price jumping over 3% before closing up 2.51%. The ETF reclaimed its 5- and 10-day moving averages and briefly tested the 20-day line. Daily turnover exceeded RMB 1.8 billion, up 155% from the previous session—the highest since November—reflecting significantly improved sector sentiment.

**Catalysts for the Rally:** 1. **Global Factors:** Expectations for Fed rate cuts intensified following weak U.S. job data. CME's FedWatch Tool now prices an 87% chance of a 25bps December cut. Goldman Sachs noted clear cooling in the labor market, calling a December cut "all but certain." 2. **Domestic Policy Tailwinds:** The CSRC chairman emphasized enhancing capital market inclusivity in a *People’s Daily* article, pledging to foster long-term "patient capital" and strategic investments. This signals strong policy support, directly benefiting brokerages.

**Notable Underperformance:** Despite today’s gains, the brokerage sector remains a laggard this year. The CSI All Share Securities Index, tracked by Brokerage ETF (512000), has risen just 1.08% YTD—ranking 28th out of 32 Shenwan primary industries. In contrast, the Shanghai Composite, Shenzhen Component, and ChiNext Index have surged 16.44%, 26.24%, and 45.19%, respectively, highlighting the sector’s stark divergence from broader market strength and robust earnings.

**Historical Context & Institutional View:** The CSI All Share Securities Index (base date: 2007-06-29) posted annual returns of 16.55% (2020), -4.95% (2021), -27.37% (2022), 3.04% (2023), and 27.26% (2024). Analysts note brokerages act as "bull market amplifiers," offering high beta during rallies. Improved policy expectations, liquidity, and fundamentals now enhance profit visibility, making the sector attractive for allocation.

**ETF Flows & Liquidity:** Brokerage ETF (512000) saw RMB 1.488 billion in net inflows over 20 days—leading its peer group. With assets exceeding RMB 39.3 billion and average daily turnover above RMB 1 billion YTD, it remains a top-tier ETF for brokerage exposure.

**Investment Note:** Brokerage ETF (512000) and its linked funds (Class A: 006098; Class C: 007531) track the CSI All Share Securities Index, covering 49 listed brokers for efficient exposure to both industry leaders and mid/small firms. Investors are reminded to assess risk tolerance amid market volatility.

*Data sources: SSE, SZSE, public disclosures. Risk disclosure: Past performance does not guarantee future results. Investors should review fund documents and assess suitability.*

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