CITIC Securities: Clear signals for market stability, optimistic capital flow in banking sector

36Kr reports that CITIC Securities research indicates that in the first week after the National Day holiday, safe-haven funds flowed into the banking sector, outperforming major indices despite broader market conditions. Over the weekend, the China Securities Regulatory Commission held an expert symposium on capital markets and financial trends, sending clear policy signals to stabilize market expectations. From a fundamental perspective, looking ahead to Q3 and the full year, core variables such as net interest margins and asset quality are expected to remain stable, ensuring steady operating conditions and positive earnings trends. In the medium term, the banking sector is entering the tail end of its risk cycle; ROE first-order derivatives have already improved. Industry ROE is expected to stabilize in absolute terms this year and next within an 8%–9% range, boosting sector valuation. This could lead to a re-rating from 'high-dividend defensive assets' to 'high-certainty equity assets.' The banking sector is poised for continued valuation appreciation, with absolute return potential extending throughout the year.