CICC "trips" the brokerage sector, the leader of the bull market faces an embarrassing start

For investors who have been immersed in the market for a while, the colloquial term "bull market leader" is not unfamiliar.

Yes, it refers to the brokerage sector.

Since September 24th, the brokerage and non-banking financial sectors have played the role of "leader" in the entire market, not only rising significantly themselves, but also driving the stocks of other industries to rise one after another.

However, on October 14th, this situation faced a "challenge".

On that day, CICC opened with a sharp drop of more than 8%, and at one point during trading, it was suspended for a long time.

Under its "leadership", the securities sector as a whole was under significant pressure. If it weren't for the banking stocks rallying in the market, the continuity of the entire market's performance might have been affected.

So, what factors caused the stock price of CICC, known as the "investment bank aristocracy", to be suspended at one point?

And what logic slowly "transferred" the embarrassment of the securities industry to the entire market?

CICC A-shares suspended trading

On October 14th (Monday), less than an hour after the A-shares market opened, CICC's A-shares were the first to hit the limit down, immediately putting pressure on the entire securities sector in terms of stock prices.

CICC has always been a large securities institution with top brand and business reputation in the industry, also known as the "investment bank aristocracy".

The intraday limit down of CICC left investors concerned momentarily stunned.

Fortunately, before the midday break, the stock price of CICC rebounded slightly.

By the close of trading, CICC's A-shares had dropped by nearly 8% in a single day.

H-shares also experienced significant volatility

Similar to A-shares, the performance of CICC's H-shares was also weak.

Looking at CICC's H-shares, there was also a 10% decline during the morning trading session, which later narrowed.

Another "leading actor" followed the decline

ZiShiTang found that after the closing of the A-share brokerage sector on October 13th, CICC led all listed brokerages in decline, with Galaxy Securities ranking second in terms of daily decline.

China Galaxy's daily decline exceeded 4 percentage points.

In fact, rumors of a "merger between CICC and China Galaxy" had circulated in the market a few days ago.

However, when the market opened on Monday this week, the two protagonists in this rumor both led the decline in the entire securities sector.

"Penalty" as a "trigger"?

CICC's leading decline on Monday reminded many investors of the notice of filing issued by the China Securities Regulatory Commission on Friday (October 11th).

On the evening of October 11th, CICC disclosed an announcement stating that the company had received a "Notice of Filing" from the China Securities Regulatory Commission on the same day, as the company was suspected of not diligently fulfilling its duties in the sponsorship of the initial public offering of Si'erxin. In accordance with the "Securities Law of the People's Republic of China" and other laws and regulations, the China Securities Regulatory Commission decided to file a case against the company Sierxin is an IPO company in which CICC's investment banking team participated in sponsorship. On July 27, 2022, the Shanghai Stock Exchange decided to terminate the review of this project.

The investigation by the China Securities Regulatory Commission found that Sierxin fabricated significant false information in the securities issuance documents disclosed. Two sponsoring representatives, including the deputy general manager of CICC's investment banking department, had signed on the prospectus.

This filing investigation came as a "surprise" to many investors, considering that a well-known investment bank in the industry faced a filing in its flagship investment banking business. The subsequent handling and rectification measures are indeed of great concern to people