Ge Long Hui·2025-06-11 09:31Core Viewpoint - The financial sector experienced a significant surge in response to merger rumors, with various ETFs and securities showing notable gains, indicating a positive market sentiment towards potential consolidation in the industry [1][4][5]. ETF Performance - The Hong Kong Securities ETF rose by 3.11%, while other financial ETFs also saw increases, with the Securities ETF Leader up by 2.19% and the Insurance Securities ETF up by 2.18% [2]. - The top-performing ETFs included the Hong Kong Securities ETF, which has a year-to-date increase of 14.24%, and the Port Hong Kong Financial ETF, which has increased by 18.70% this year [2]. Market Catalysts - Multiple catalysts are driving the sector's performance, including a policy from the Central Committee and State Council that allows companies from the Guangdong-Hong Kong-Macao Greater Bay Area to list on the Shenzhen Stock Exchange, potentially boosting IPO activities and improving brokerage revenues [4]. - Recent approvals from the China Securities Regulatory Commission (CSRC) for several brokerages to change their actual controllers to Central Huijin have reignited market expectations for mergers and acquisitions among brokerages [4][6]. Regulatory Support - The Central Financial Work Conference emphasized the need to accelerate the construction of a strong financial sector and encouraged mergers and acquisitions to enhance the competitiveness of investment banks [6]. - The CSRC's support for mergers among brokerages under the same controlling entity is expected to lead to increased consolidation activity in the sector [6][7]. Share Buybacks - There has been a rise in "cancellation-style" share buybacks among brokerages, with six firms having repurchased a total of 129 million shares worth 1.31 billion yuan this year, reflecting management confidence in their companies' value [7]. ETF Size and Fees - The A-share financial-themed ETFs tracking various indices have seen significant growth, with the largest being the Guotai Junan Securities ETF and the Huabao Securities ETF, with sizes of 29.847 billion yuan and 22.983 billion yuan, respectively [8]. - The E Fund Hong Kong Securities ETF has also experienced rapid growth, reaching a size of 7.897 billion yuan, with competitive management and custody fees of 0.15% and 0.05% [9][10].