On July 29, 2026, the Hong Kong-listed Chinese broker sector collectively strengthened, becoming the biggest highlight of the day. By the close, CITIC Securities (06030.HK) rose 5.8%, Huatai Securities (06886.HK) gained 6.2%, while CICC (03908.HK) and China Merchants Securities (06099.HK) advanced 4.9% and 5.5% respectively. The Hang Seng Financial Sub-Index rose 1.2%, outperforming the 0.6% gain of the Hang Seng Index. Market analysts pointed out that deepening capital market reforms on the mainland, coupled with active inflows via the Stock Connect, jointly drove the valuation recovery of broker stocks.
Favorable policies emerge, opening up broker business space
Recently, capital market reforms on the mainland have accelerated. On July 28, the China Securities Regulatory Commission announced the full implementation of the registration-based IPO system, while simultaneously optimizing supporting systems for refinancing and M&A. This means broker investment banking businesses will see expansion opportunities. Meanwhile, the Cross-boundary Wealth Management Connect pilot has been expanded to more mainland cities, with the individual investment quota raised from 1 million to 3 million yuan, directly benefiting Chinese brokers with cross-border advantages.
In addition, the ETF connectivity mechanism between the mainland and Hong Kong has been further optimized, adding more sector ETFs and thematic ETFs, which helps increase trading volume and boost broker brokerage and custody income. Chen Mengjie, chief strategy analyst at Yuekai Securities, said: "This series of policy measures has significantly raised expectations for market activity. As the core intermediary of the capital market, brokers will benefit most directly."
Fund flows also warming; Stock Connect sees consecutive net buying
In terms of fund flows, southbound capital has recently accelerated inflows into Hong Kong stocks. According to HKEX data, the Stock Connect recorded net buying for three consecutive trading days from July 27 to 29, with a cumulative net inflow of HK$12.8 billion, of which the financial sector accounted for over 30% of net buying. Investors showed strong interest in H-shares of Chinese brokers, with the Stock Connect holdings ratio of stocks like CITIC Securities and Huatai Securities continuing to rise.
On the foreign side, after the MSCI China Index rebalancing, the weight of Hong Kong financial stocks increased, with both passive and active funds showing signs of increased positions. Goldman Sachs' latest research report pointed out that currently, HK-listed Chinese broker stocks are at historically low valuations, with an average price-to-book ratio of only 0.8 times, while ROE has rebounded to over 10%, offering a margin of safety and upward flexibility.
Sector rotation: focus on leaders and specialty stocks
The stocks with the largest gains today showed divergence: leading comprehensive brokers performed steadily due to expectations from investment banking and wealth management businesses; while specialty brokers such as internet brokers, like Tonghuashun (03333.HK) (a Hong Kong-listed concept stock related to East Money, though East Money itself is not listed in Hong Kong), rose 4.2% and were favored by funds. In addition, China Renaissance (01911.HK), which focuses on cross-border M&A, also rose 3.7%.
According to CICC research, in the early stage of capital market reform dividend release, leading brokers will benefit first due to their comprehensive strength, but some small and medium-sized brokers with differentiated advantages in niche areas are also worth attention. They suggest investors focus on three main lines: first, leading brokers with strong investment banking and asset management capabilities; second, internet brokers benefiting from wealth management transformation; and third, regional brokers with a high proportion of cross-border business.
Risk warnings and outlook
Despite the short-term sector recovery, investors should still be aware of potential risks. First, whether market turnover can continue to expand is uncertain; if the average daily turnover of A-shares and Hong Kong stocks fails to effectively break through the trillion level, broker brokerage revenue growth may be limited. Second, the impact of interest rate changes on broker proprietary trading cannot be ignored; if major global central banks continue to raise rates, valuations may be suppressed. In addition, geopolitical risks and changes in Sino-US relations may also disrupt cross-border capital flows.
Looking ahead to the second half of the year, most institutions believe the HK-listed Chinese broker sector still has upside potential. Morgan Stanley expects that under the background of full implementation of the registration system and deepening of the Cross-boundary Wealth Management Connect, net profit growth of mainland brokerages in 2026 could reach 15%-20%, and H-share brokers are expected to outperform their A-share peers. Currently, sector valuations are at historical lows, offering good value, and investors may buy on dips.
Overall, the collective rally of HK-listed Chinese broker stocks on July 29, 2026, is the result of the resonance of policy dividends and fund flows. As China's capital market reform and opening up continue to deepen, brokers, as important bridges connecting capital and the real economy, are being revalued for their long-term value. Investors are advised to stay tuned and make rational decisions based on their own risk preferences.
