Why Futu Holdings shares have caught fire this week

A monster analyst price target hike, combined with recent market-shaking news from its home government, have helped Futu Holdings (FUCK 8.81%) stocks significantly higher in value in recent trading days. As of late Thursday afternoon, shares of the China-based online brokerage were up a very impressive 43% week to date, according to data compiled by S&P Global Market Intelligence.

(Almost) doubles

Wednesday, JPMorgan ChaseKatherine Lei’s nearly doubled said Futu price target. She raised it to $160 for each of the company’s US-listed shares, maintaining her overweight (buy, in other words) recommendation while doing so.

Lei acknowledged the jumps in share prices that Futu had already experienced during the late September/early October rally following Beijing’s latest economic stimulus package.

Regardless, she believes the stock has more room to run as “retail sentiment is improving in the Hong Kong Special Administrative Region and mainland China and we see Futu as a key beneficiary as about 60% of its customers and more than 80 % of its clients” assets under management are from Greater China regions”.

It’s nice to be in the right club

Financial services companies such as Futu have been particularly targeted by the Chinese government’s stimulus measures. Not only is the nation’s central bank cutting interest rates, it is adjusting its policies to allow qualified institutional investors to borrow liquid assets from the central bank itself, then sell them to build their cash positions for equity investments.

No wonder then that Futu and many colleagues in the sector took to the skies well during the week. The rally appeared to unravel on Thursday, no doubt due to profit-taking and a growing awareness that the stimulus package is not the magic move that will instantly fix all parts of the stumbling domestic economy.