China's Brokerage Index Down 14.4% YTD Despite Shanghai Composite Gaining 3.6%, Huatai Says Headwinds Easing

According to Huatai Securities research, China's brokerage stock index has underperformed significantly since January, down 14.4% year-to-date as of May 22 compared with the Shanghai Composite's 3.6% gain. The divergence is primarily driven by liquidity and policy headwinds.

The brokerage sector has entered a sustainable growth phase, supported by easing liquidity pressures, continued net inflows into brokerage ETFs, and a policy framework protecting market operations. With valuations and positioning at low levels, Huatai notes the sector offers a strategic allocation opportunity.