Chinese Assets Keep Soaring
Dear brothers and sisters, tonight is a sleepless night as Chinese assets go wild!
Tonight's U.S. stock market saw the Dow Jones Industrial Average rise by more than 200 points, and the Nasdaq Composite Index increased by over 0.5%.
Chinese assets continue to soar! The Nasdaq Golden Dragon Index skyrocketed by more than 10%, reaching a new high since May.
The A50 futures once surged by more than 3%!
The Chinese yuan exchange rate broke through the "7" threshold, rising by more than 500 points during the session!
All of this stems from the Politburo meeting on September 26.
The timing of this meeting was unusual. Generally, economic policies are discussed in April, July, and December, but this time it was held in September, reflecting the central government's emphasis on current economic work. This unexpected arrangement demonstrates the determination for stable growth policies and sends a strong signal.
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Secondly, although the meeting's communiqué was only over 1,200 words, it contained a lot of information.
For example, in the analysis of the economic situation, it explicitly stated "face difficulties"; in terms of monetary policy, it no longer mentioned prudent and precise measures but directly stated the intention to lower reserve requirements and interest rates. There is also a new approach to real estate, aiming to promote the "stabilization and recovery" of the real estate market.
This series of policy expressions has led to a major reversal in the attitude of foreign capital. Hedge fund legend David Tepper said in a program: "I thought the Fed's rate cut decision last week would lead China to loosen its policies, but I didn't expect them to make such a big move. This is a complete turnaround." When Tepper was asked what Chinese assets he bought, he replied: "Everything, I would buy ETFs, futures, everything."Additionally, on the evening of September 26th, with the approval of the Central Financial Commission, the Central Financial Office and the China Securities Regulatory Commission jointly issued the "Guiding Opinions on Promoting the Entry of Medium and Long-term Funds into the Market."
The document contains specific institutional arrangements for five major categories of long-term capital, including insurance funds, social security funds, enterprise annuities, various types of pension funds, and wealth management products:
1. Allow insurance funds, various pension funds, and other institutional investors to participate in listed companies' private placements as strategic investors in accordance with the law.
2. Research and optimize or exempt regulatory requirements for short-term trading and disclosure of substantial holdings by ETFs and other institutional investors.
3. Establish and improve a long-term assessment mechanism for insurance funds, various pension funds, and other medium and long-term funds with a cycle of more than three years, perfect the assessment mechanism, and enrich the long-term investment models for insurance funds.
4. Improve the policy and regulatory system for the investment of the National Social Security Fund and the Basic Pension Insurance Fund.
5. Support individual choice strategies for enterprise annuities and allow managers to make differentiated investments.
On the evening of September 26th, CITIC Securities Research published an article on the company's official account that went viral, with a title consisting of just one word: "Do."
In the report, CITIC Securities stated that the "China Red" has once again colored the entire market.
On September 26th, the September Political Bureau meeting unusually analyzed the economic situation, the lifeline of the nation, involving policies in multiple fields such as fiscal, monetary, capital markets, employment, and private economy.In the afternoon session, the market opened with a strong pull across the board. All 30 CITIC first-level industries saw gains, with almost all individual stocks turning red, and over a hundred stocks hitting their upper limit!
It's a return of confidence and spirit.
The Shanghai Composite Index broke through the 3000 point mark in just three trading days, starting from over 2700 points. Trading volume once again exceeded one trillion yuan, setting a new high in nearly five months.
The main A-share market indices all rose by more than 6% this week, with the Shanghai 50 Index's weekly increase reaching 11.86%.
Weekly gains of main A-share indices this week
Data source: Wind, CITIC Securities Customer Development Center; data as of September 26, 2024. Historical data does not represent future performance. This is only a statistical result of historical data and does not constitute specific investment advice or promotional recommendation.
The signal is clear, and it can be summarized in one word: Go!
With "Go" at the forefront and united in purpose.
Believe in your country, believe in yourself. In fact, every ordinary person is the backbone of China. Taking responsibility and striving forward are the most pragmatic feelings of home and country for the Chinese people.
As the National Day approaches, give a thumbs up to the country, and don't forget to give one to yourself. Do not fear difficulties, do not lie flat, manage every small home well, and together, support the entire country.CITIC Securities Analysis:
According to previous policy patterns, the September Politburo meeting usually discusses the economy less frequently, but this meeting focused on analyzing the economic situation, which may reflect the decision-makers' emphasis on increasing the intensity of macroeconomic regulation and strengthening counter-cyclical adjustments.
This meeting covered various aspects including fiscal policy, monetary policy, real estate, capital markets, private economy, and livelihood employment, emphasizing the need to strive to complete the annual economic and social development goals and tasks.
The focus of subsequent fiscal policy may shift towards benefiting people's livelihoods and promoting marginal consumption, with assistance to low and middle-income groups and stimulating the trend of consumption upgrading likely to be key areas of work. The shift in the focus of fiscal expenditure can help improve the efficiency of fiscal growth stabilization.
The meeting proposed, "to lower the reserve requirement ratio and implement a strong interest rate cut," which may indicate an increased intensity of monetary policy easing.
The meeting called for promoting the stabilization of the real estate market, which logically helps to alleviate the drag on residents' consumption willingness caused by factors such as falling housing prices and existing mortgages. However, considering the adjustment of the real estate market has a certain inertia, the timing of policy effectiveness still needs to be observed.
The meeting emphasized efforts to boost the capital market. In addition to the previously implemented merger and acquisition six articles and market value management guidelines, it is recommended to continue to pay attention to the upcoming "Guiding Opinions on Promoting Long-term Capital into the Market" and other documents, and to continuously improve the capital market "1+N" policy.
In the short term, "overcoming difficulties" and in the long term, "promoting development" resonate, and the development environment for private enterprises is expected to be further optimized.
In terms of employment stability policies, it is expected that the employment public service system and the employment support system for key groups such as college graduates will be further improved, in order to better cope with the challenges faced by the current job market.
With determination and unity, fully stimulate the enthusiasm, initiative, and creativity of the whole society to promote high-quality development.Morgan Stanley has indicated that, from a technical standpoint, China's CSI 300 Index may still have approximately 10% room for short-term growth. The firm has noted that the Politburo meeting and the stimulus plan announced earlier this week by the central bank and other regulatory agencies were both very positive. They added that what truly surprised the market were the unprecedented market stabilization measures. The bank pointed out that the most important thing now is to swiftly follow up with clear details on execution and implementation, as well as a timetable. China's stock market has experienced its best week in a decade.