Shares of several Chinese brokerage houses surged on Monday, after earnings reports showed that state-run investing firm China Securities Finance Corp had increased its stake in the firms, Bloomberg reports.
Orient Securities Co, was up by the 10% daily limit, while China Merchants Securities Co headed for its highest close since it started trading in Hong Kong in October.
“China Securities Finance’s stake increases reflect the investment value in brokerage shares,” Sinolink Securities Co analysts led by Li Lifeng wrote in a note. “Brokers will be the primary beneficiary in the stock market as further upside is likely after the Shanghai index hit a 19-month high.”