Moody's, Fitch, and S&P Intensively Upgrade Chinese Broker Ratings This Year

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Moody's, Fitch, and S&P, the three major international rating agencies, have this year upgraded the ratings and outlooks of Chinese securities firms at a rare, synchronized pace. Moody's raised the long-term issuer ratings of CICC, CITIC Securities, and Guotai Haitong from Baa1 to A3, with CICC International also upgraded to A3, and Guotai Junan International raised from Baa2 to Baa1. Earlier, on September 16, S&P raised the industry anchor rating for Chinese securities companies from bb to bb+, upgraded GF Securities from BBB with a stable outlook and A-2 short-term rating to BBB+ with a stable outlook and A-2 short-term rating, and revised the outlooks of CITIC Securities, Guotai Haitong, Galaxy Securities, and Orient Securities from stable to positive. Fitch, on June 10, assigned first-time long-term issuer ratings of A- to CITIC Securities and CITIC Securities International, making CITIC Securities the first domestic securities firm to receive an A- rating from Fitch, and on June 26 upgraded CICC and CICC International from BBB+ to A-. A key driver behind this round of adjustments is the substantial acceleration of Chinese brokers' overseas expansion. In the first half of this year, the overseas business revenues of five brokers—CITIC Securities, Guotai Haitong, Huatai Securities, GF Securities, and China Merchants Securities—grew by more than 70 percent year on year. At the same time, small and mid-sized brokers are showing increased demand for capital replenishment of their international subsidiaries. On September 30, Guolian Minsheng Securities announced that the China Securities Regulatory Commission had no objection to the company using its own funds to increase the capital of its wholly owned subsidiary Guolian Hong Kong by no more than 2 billion yuan.

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CITIC Securities Co Ltd
600030
▲ PositiveCapitalrelevance

Moody's raised CITIC Securities' long-term issuer rating from Baa1 to A3, S&P revised its outlook to positive, and Fitch assigned a first-time A- rating.

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