Weekly report of the financial industry (the 21st week): the implementation of shareholding reduction rules LPR remains unchanged

Views of this week:

    In May, LPR held its ground and reduced its holdings. Bank>Securities>Insurance. In May, the LPR held its ground to help protect the bank interest margin. The four departments' notice emphasized unblocking the monetary policy transmission mechanism and avoiding idle capital deposition. The CSRC issued relevant rules on share reduction to strictly regulate the reduction of large shareholders, especially controlling shareholders and actual controllers, which reflects the political and popular nature of the capital market and helps foster patient capital. Last week, the A/H market fell back, and insurance stocks also fell generally. This was the first pullback of the insurance sector after five consecutive weeks of gains. The H-share pullback was greater than that of A-share.

    Sub industry perspective

    1) Bank: In May, LPR stood still and helped protect bank interest margin. The Notice on Doing a Good Job in Key Work of Cost Reduction in 2024 emphasized unblocking the monetary policy transmission mechanism and increasing the loan issuance of inclusive small and micro enterprises. The policy is expected to be better+the dividend advantage is prominent, seize the opportunity of bank allocation. 2) Securities: The CSRC issued relevant rules on share reduction, strictly regulating the share reduction of major shareholders, especially controlling shareholders and actual controllers, reflecting the political and people nature of the capital market and helping to cultivate patient capital. Seize the structural opportunities of the sector driven by policies. 3) Insurance: Last week, the A/H market fell back, and insurance stocks also fell. This was the first callback of the insurance sector after five consecutive weeks of gains. The H-share callback was larger than the A-share callback. After continuous rise, profit taking of some funds is a normal reflection of the market.

    Key companies and developments

    1) Banks: It is recommended that state-owned big banks, real estate chain joint-stock banks, high-quality small and medium-sized banks, such as Nanjing, and China Merchants Bank. 2) Securities: It is recommended that China Galaxy, a high-quality central enterprise securities firm, and securities firms in characteristic regions. 3) Insurance:

    The debt side of listed insurance companies has a significant recovery trend, and there is still room for the current valuation to be repaired. It is recommended to configure high-quality leading enterprises.

    Risk tip: the economic recovery is not as strong as expected; Asset quality deteriorated more than expected.