China’s main stock indexes recouped early losses and posted their biggest daily gains in more than a week on Monday, as a surge in banking stocks offset the losses in brokerages.
China’s securities regulator had said on Friday that it is considering issuing brokerage licences to banks, potentially creating a new revenue stream for lenders and intensify competition in the brokerage industry.
Investment bank China International Capital Corp (CICC) said in a report on Monday that Bank of Communications (BoComm) and Industrial Bank Co Ltd will likely become the first lenders to be awarded brokerage licences in China.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 1.7 per cent, while the Shanghai Composite Index jumped 1.9 per cent.
Shenzhen’s ChiNext, the Nasdaq-style board for high-growth start-ups, extended recent gains, rising 2 per cent.
Investors appear to have shrugged off worries over tighter liquidity as 23 companies are poised to sell shares publicly this week, potentially locking up over 3 trillion yuan ($478.84 billion) of capital.
Among the most active stocks in Shanghai were Bank of China , up 5.2 per cent at 4.03 yuan; Agricultural Bank of China, up 4.4 per cent at 3.29 yuan and Industrial Bank, up 8.7 per cent at 14.70 yuan.
In Shenzhen, TCL Corp, up 1.4 per cent at 5.17 yuan; BOE Technology, up 0.3 per cent at 3.16 yuan; and Dongxu Optoelec, down 3.6 per cent at 10.58 yuan, were among the most actively traded.
Total volume of A shares traded in Shanghai was 32.1 billion shares, while Shenzhen volume was 18.5 billion shares.