The bullish policy continues to catalyze, with funds massively buying Chinese assets. On the evening of September 26, Chinese assets surged, with Chinese concept stocks, China asset ETFs, FTSE China A50 Index Futures, Hang Seng Index Futures, and RMB exchange rates all skyrocketing.

Tonight, china's assets have received two bullish news. First, 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", emphasizing the three measures of continuously optimizing the capital market ecosystem, vigorously developing equity public funds, and focusing on improving the supporting policies and systems for various medium and long-term funds into the market;

Secondly, the latest statement from the central bank. The People's Bank of China held a video conference for the entire system on the afternoon of the 26th, emphasizing the need to speed up the issuance of documents on financial increment policies, and implement each policy measure one by one.

After a series of heavyweight favorable policies were introduced, foreign institutions have become more optimistic about Chinese assets. Foreign institutions such as Goldman Sachs, UBS Group, and Morgan Stanley have expressed varying degrees of optimistic views.

All skyrocketing

On the evening of September 26, Chinese assets soared, with Chinese concept stocks, China assets etf, ftse china a50 index futures, Hang Seng index futures, and RMB exchange rates all skyrocketing.

In particular, after the opening of the US stock market, Chinese concept stocks collectively surged, as of the time of writing,$NASDAQ Golden Dragon China (.HXC.US)$ skyrocketing over 12%, hitting a new high since May; $TAL Education (TAL.US)$ skyrocketing over 30%, $KE Holdings (BEKE.US)$ skyrocketing over 23%, $JD.com (JD.US)$ Surged more than 14%.$PDD Holdings (PDD.US)$Surged more than 11%.$XPeng (XPEV.US)$rose more than 10%,$Alibaba (BABA.US)$Rose more than 7%.

China Asset ETF US stocks opened high and continued to rise, with the increase expanding.$Direxion Daily FTSE China Bull 3X Shares ETF (YINN.US)$Rising by 25%,$Direxion Daily CSI China Internet Index Bull 2x Shares ETF (CWEB.US)$rose more than 24%,$Direxion Daily CSI 300 China A Share Bull 2X Shares (CHAU.US)$,$ProShares Ultra FTSE China 50 (XPP.US)$Rising by nearly 17%,$KraneShares CSI China Internet ETF (KWEB.US)$Up 12%,$iShares China Large-Cap ETF (FXI.US)$rose more than 8%.

FTSE China A50 Index Futures Night Session $FTSE China A50 Index Futures(OCT4) (CNmain.SG)$ The increase has expanded to 3%, reaching a new high since August 2023.

Hang Seng Index Futures Night Session also continued to expand by 2.7%, trading at 20671 points, with the Hang Seng Index closing up over 4% today.

Offshore Renminbi against the US dollar exchange rate rose above the 6.99 level, surged over 450 points within the day, now at 6.9874.

On the news front, the Political Bureau of the CPC Central Committee held a meeting on September 26 to analyze and study the current economic situation and deploy the next economic work. The market is closely watching the many heavyweight signals released during the meeting.

The meeting expressed the need to issue and use super-long-term special national bonds and local government special bonds effectively, to better leverage the role of government investment driving. It is necessary to reduce the reserve requirement ratio, and implement a powerful interest rate cut.

The meeting emphasized the need to promote the stability of the real estate market, strictly control the increment of commercial housing construction, optimize the stock, improve quality, increase the funding for 'white list' projects, and support the revitalization of idle land stock.

The meeting emphasized efforts to boost the capital market, vigorously guide mid-to-long term funds into the market, remove barriers for social security, insurance, wealth management funds to enter the market. Support listed companies in mergers and acquisitions, steadily promote reforms in public fund management, and explore the introduction of policy measures to protect small and medium investors.

Two major bullish news

Tonight, Chinese assets welcomed two more bullish news.

One of them is the issuance of the 'Guidance on Promoting the Entry of Medium to Long-term Funds into the Market' jointly issued by the Central Financial Office and the China Securities Regulatory Commission (referred to as the 'Guidance'). The focus is on continuously optimizing the capital market ecology, vigorously developing equity public funds, and improving various policies and systems to facilitate the entry of medium to long-term funds into the market.

The "Guiding Opinions" propose to effectively enhance the enthusiasm and stability of insurance funds, various pension funds, and other institutional investors to participate in the capital markets, allowing insurance funds, various pension funds, and other institutional investors to participate in the additional issuance of listed companies as strategic investors in accordance with the law.

The "Guiding Opinions" clearly propose to "establish and improve a three-year or longer long-term assessment mechanism for insurance funds, various pension funds, and other middle- to long-term funds." By constructing a multi-dimensional assessment system that interconnects investment management institutions, investment managers, product portfolios, etc., and establishing and improving management systems that are compatible with long-term assessments, it is beneficial to reduce the impact of short-term market fluctuations on the investment performance of middle- to long-term funds, promote various middle- to long-term funds to better practice the concepts of long-term investment and value investment, and better play the role of the capital market as a "stabilizer" and "ballast."

Secondly, the latest statement from the central bank. According to the official website of the People's Bank of China, on the afternoon of September 26, the People's Bank of China held a video conference for the entire system to study and implement the spirit of the central political bureau meeting on September 26, and fully promote the recent financial increment policy measures to accelerate implementation and effectiveness. Pan Gongsheng, Secretary of the Party Committee and Governor of the People's Bank of China, attended the meeting and delivered a speech. The meeting emphasized that the central political bureau meeting made a profound analysis of the current economic situation, made clear arrangements for the next economic work, and the People's Bank of China system must act quickly, go all out, and comprehensively implement it. It is necessary to quickly introduce files on financial increment policy measures, and comprehensively implement and put into practice each policy measure. Enhance department coordination, establish relevant task forces, mobilize the entire system to work together, effectively promote the sustainable recovery and improvement of the economy, and the high-quality development of finance.

Foreign investors are collectively optimistic.

After a series of heavyweight favorable policies were introduced, foreign institutions have become more optimistic about Chinese assets. Foreign institutions such as Goldman Sachs, UBS Group, and Morgan Stanley have expressed varying degrees of optimistic views.

Goldman Sachs recommends tactical investment in Chinese stocks in its latest strategy report. Goldman Sachs stated that from the recent measures released, it can be seen that policymakers are focusing on economic growth and markets, enough to catalyze a rebound sparked by policies. Currently, market tactical rebounds are conditions similar to the tactical recovery in April 2024. Until the real estate issue is resolved, the market mainly consists of trading opportunities, with a recommendation to buy into shareholder return themes strategically. In addition, Goldman Sachs believes that compared to A-shares, Hong Kong stocks have a stronger earnings revision.

Du Meng, Deputy General Manager of Morgan Asset Management China, believes, "A series of recent meetings reflect the government's emphasis on the economy and capital markets, and investors are starting to anticipate more targeted and effective policy implementation, with investment sentiment gradually warming up. Early periods often exhibit characteristics of high-resilience oversold rebounds, and in the long run, high-quality companies may show sustainable upward potential. We believe that the change in sentiment will drive the market from the early phase of excessive pessimism to gradually return to a relatively rational pricing framework. Excellent companies that were undervalued in the early stage are likely to undergo value restoration gradually."

Morgan Stanley's latest release of Chinese stock strategy indicates that the central bank's latest measures should help improve investor sentiment and liquidity, and drive positive responses in the onshore and offshore markets in the short term. It is expected that the onshore A-share market and the offshore market will actively respond to this development and may lead to tactical rebounds in the short term, and even perform better than emerging markets (EM).

Wang Tao, Managing Director of UBS Asian Economic Research and Chief China Economist, predicts that in the coming months the government will introduce more effective fiscal support measures to stabilize economic growth.

Editor/Emily