Source: Securities Times
Author: Zhang Tong/Arranged by

Macro • Highlights

Lan Fuan: The central government still has a lot of room to raise the deficit

Minister of Finance Lan Foan said at the press conference of the State Information Office on October 12 that countercyclical adjustment is by no means limited to four points; other policy tools are being studied, and there is still plenty of room for the central government to raise the deficit.

Lan Foan: Using a combination of local government special bonds, special funds, tax policies and other tools to support and stabilize the real estate market

Minister of Finance Lan Foan said at the press conference of the State Information Office on October 12 that the combined use of tools such as local government special bonds, special funds, and tax policies is used to support and stabilize the real estate market.

Lan Fuan: Plans to increase large-scale debt limits at once to replace hidden debts existing in local governments

Minister of Finance Lan Foan said at the press conference of the State Information Office on October 12 that it is proposed to increase large-scale debt limits at one time, replace hidden debts in local government stocks, increase support for local governments to resolve debt risks, and fully explain the relevant policies to the public after implementing relevant legal procedures. This policy is the strongest measure introduced in recent years to support debt. This is a timely rain that will greatly reduce the pressure on local governments, free up more resources to support economic development and consolidate the “Three Guarantees” at the grassroots level.

Liao Min: Special bonds will be used to buy existing commercial housing

Vice Minister of Finance Liao Min said at the press conference of the State Information Office on October 12 that to increase the supply of affordable housing, considering that there are currently many houses already built for sale, it will take good use of special bonds to buy existing commercial housing, continue to make good use of subsidy funds for affordable housing projects, further optimize and adjust the direction of support, appropriately reduce the scale of construction, and support more local acquisitions by digesting stock housing.

National Bureau of Statistics: CPI rose 0.4% year on year in September

The National Bureau of Statistics announced on October 13 that in September 2024, national consumer prices rose 0.4% year on year. In September, consumer prices across the country remained flat month-on-month.

In September 2024, national consumer prices rose 0.4% year on year. Among them, cities rose 0.4%, rural areas rose 0.6%; food prices rose 3.3%, non-food prices fell 0.2%; consumer goods prices rose 0.5%, and service prices rose 0.2%. On average from January to September, national consumer prices rose 0.3% over the same period last year.

Furthermore, in September 2024, the ex-factory price of industrial producers across the country fell 2.8% year on year and 0.6% month on month; the purchase price of industrial producers fell 2.2% year on year, down 0.8% month on month. On average from January to September, the ex-factory price of industrial producers decreased by 2.0% compared to the same period last year, and the purchase price of industrial producers decreased by 2.1%.

Four departments including the central bank issued “Opinions on Using the Role of Green Finance to Serve the Construction of a Beautiful China”

In order to implement the decisions and arrangements of the Party Central Committee and the State Council to comprehensively promote the construction of a beautiful China and help build a beautiful China through high-quality development of green finance, recently, the People's Bank of China, the Ministry of Ecology and Environment, the General Administration of Financial Supervision, and the China Securities Regulatory Commission jointly issued “Opinions on Using the Role of Green Finance to Serve the Construction of a Beautiful China” (hereinafter referred to as “Opinions”), which proposed 19 key measures in four areas: increasing support in key areas, enhancing green finance professional service capabilities, enriching green finance products and services, and strengthening implementation guarantees.

The “Opinion” clearly focuses on the actual needs of building a beautiful China, coordinates the planning of a number of major iconic projects, and increases docking and financing support. In accordance with the requirements of collaborating to promote carbon reduction, pollution reduction, greening, and growth, we will build a beautiful China construction project bank around key areas such as the construction of a pioneering zone in beautiful China, green and low-carbon development of key industries, further promotion of pollution prevention and control, and ecological protection and restoration to effectively improve the accuracy of financial support.

Finance/Securities

The financial world is very popular, involving the futures market!

Recently, the General Office of the State Council forwarded “Opinions on Strengthening Supervision and Risk Prevention and Promoting High-Quality Development of the Futures Market” (hereinafter referred to as “Opinions”) from the China Securities Regulatory Commission and other departments.

The “Opinion” suggests that by 2029, an overall framework for the supervision system and business model of futures with Chinese characteristics will be formed, the futures market supervision capacity will be significantly enhanced, the variety layout will be more suited to the structure of the national economy, market depth and pricing capacity will be further improved, and a team of intermediaries with integrity and compliance with the law, professional and steady, and efficient service will be built. By 2035, a safe, standardized, transparent, open, dynamic and resilient futures market system will be formed. Major products will attract the full participation of global traders, the influence of commodity prices and market competitiveness will be significantly enhanced, and the comprehensive strength and international competitiveness of intermediaries will be further enhanced. By the middle of this century, a world-class futures exchange with complete products, complete functions, efficient service, stable operation, and global price coverage will be built, greatly improving the futures market's ability to serve the national economy and allocate global resources, and provide strong support for Chinese-style modernization and the construction of a financial power.

Is A share now a “wave of holdings reduction”? This is not the case

Recently, there has been talk of a “wave of holdings reduction” in the market. Through public searches and comparisons, no signs of a “wave of holdings reduction” have been found in the market. According to the data, on the evening of October 9, the evening of the 10th, and the evening of the 11th, the Shanghai and Shenzhen markets respectively disclosed 9, 7, and 7 shareholders' holdings reduction plans. Compared with the previous average, the number is still at a low level.

At the same time, many claims confuse the announcement of the “amount of holdings reduction” with the announcement of the holdings reduction plan and the announcement of the results of the holdings reduction, amplifying the negative effects of the holdings reduction. Relevant sources close to the supervisory authorities pointed out that the disclosure of the holdings reduction plan was generally stable, with a marked decrease compared to the same period in previous years. In response to this, an ecosystem of standardized, rational, and orderly holdings reduction for listed company shareholders has gradually formed. Corresponding to this, the number of listed companies' repurchases and majority shareholders have increased their holdings. In particular, a number of leading and weighted stock companies have repurchased and increased their holdings, demonstrating confidence in the medium- to long-term prospects of the market.

The latest release from the Shanghai Stock Exchange!

On October 11, the Shanghai Stock Exchange issued the “Application Guidelines No. 6 of the Shanghai Stock Exchange Issuance and Listing Review Rules - Asset-Light and High R&D Investment Certification Criteria (Trial)” (hereinafter referred to as the “Guidelines”), which clarified the scope of “asset-light and high R&D investment” applicable to the refinancing of companies listed on the Science and Technology Innovation Board and specific certification standards.

According to the “Guidelines”, science and technology innovation board companies recognized as having “light assets and high R&D investment” characteristics are no longer limited to the “30% reflow ratio” when refinancing, but more than 30% can only be used for R&D investment related to the main business.

This means that most of the funds raised by science and technology innovation board companies that meet the accreditation criteria can be used for R&D investment during refinancing.

Industry/Company

Is there a “anti-price wave” for second-hand property owners in Shenzhen? The reporter sought evidence

Recently, in the Shenzhen real estate market, news about second-hand property owners are busy raising prices and that there is a “reverse price wave” from owners has been circulating frequently. There are also pictures circulating on the Internet that some WeChat groups have begun calling on owners to “protect their prices” and provide listing price suggestions to owners selling in the community. So, what is the factual state of the market?

In an interview with the reporter in an “influencer” luxury residential area in Nanshan District, Shenzhen, a real estate agency manager told the reporter that the price of second-hand properties currently listed in the district is above 10 million yuan. After the Shenzhen property market policy was optimized a few days ago, many second-hand property owners have raised prices ranging from 2 million yuan to 5 million yuan. There are fewer “reverse price” property transactions, but these are all properties that were previously listed at lower prices. Meanwhile, during a visit to Shenzhen's Luohu District and Futian District, I discovered that many real estate agency managers said that their customers have recently taken the initiative to contact themselves to ask if the second-hand properties they have seen before have “increased in price.”

CICC has been sued by the Securities Regulatory Commission!

On the evening of October 11, CICC issued an announcement stating that the company received the “Notice of Case Filing” from the China Securities Regulatory Commission on the same day.

According to the “Notice of Case Filing”, the China Securities Regulatory Commission decided to file a case against the company on September 25, 2024, according to the “Securities Law of the People's Republic of China” and “Administrative Penalty Law of the People's Republic of China” and other laws and regulations due to the company's suspicion that Silchip's initial public offering of shares was not diligent and conscientious.

Cathay Pacific Junan and Haitong Securities both announced!

On the evening of October 11, the two companies both issued an announcement of abnormal fluctuations in stock trading. After a self-inspection by the company and written letters to the company's shareholders, it was confirmed that there was no other important information that should be disclosed but not disclosed, other than the already disclosed matter of planning for Guotai Junan to absorb and merge Haitong Securities and raise supporting capital.

The two companies warned that investors are kindly requested to pay attention to market transaction risks, make rational decisions, and invest prudently.

Watch this week

Financial Street Forum Annual Meeting Teaser

With the approval of the State Council, the 2024 Financial Street Forum Annual Meeting will be held in Beijing Financial Street from October 18 to 20. The theme of this year's annual forum is “Trust and Confidence - Discuss Financial Openness, Cooperation, and Share Stable Economic Development”.

According to Wang Li, Deputy Director of the General Office of the China Securities Regulatory Commission, Wu Qing, Party Secretary and Chairman of the CSRC, will attend the opening ceremony of the annual meeting and deliver a keynote speech at this year's forum. The Securities Regulatory Commission will also organize matters such as the main forum, parallel forum, and fintech conference in accordance with the unified arrangement of the organizing committee.

Institutional Strategy

CITIC Securities: Fiscal policy exceeded expectations, and the market has entered a shift period

CITIC Securities said that fiscal policy is the focus of current market attention. The overall policy statement of the Ministry of Finance exceeds expectations, and the shift in policy ideas is more important than the magnitude of intensity; currently, the market is in a transition phase from a major reversal of expectations to a major inflection point in the market. The market's long and short game intensified after the initial pulse-ups, and the pace of entry of OTC incremental capital has slowed, but the scale of potential market entry capital is still large. It is expected that the market will gradually shift from being driven by capital sentiment to being driven by fundamental verification.

Huajin Securities: The clear tone of fiscal strength may boost the stock market

The Huajin Securities Research Report pointed out that the trend of fiscal strength is clear and may boost the short-, medium-, and long-term trends in the A-share market. (1) In the short term, after A-shares rise and fall back, they are expected to be boosted by policies and stabilized. First, from historical experience, the trend of the market after significant expansion was mainly influenced by policies and fundamentals; second, the policy statements at this press conference were positive, which is expected to dispel investors' concerns about strong policies and weak economic fundamentals. (2) In the medium term, the medium-term logic of increasing stock market valuations due to strong policies was further confirmed. (3) On a long-term perspective, the possibility that the fundamental conditions required for the formation of a bull market will be met is increasing. First, policies and liquidity conditions are in place. Second, in terms of fundamentals, stronger fiscal policies may increase the recovery in profit growth, and the fundamental conditions driving the long-term bull market may be confirmed.

Haitong strategy: structurally, technology and high-end manufacturing or mid-term main line

According to the Haitong Strategy Research Report, A-shares have risen quite a bit since September 24. As trading volume cools down, the market may have entered a phase of turbulence, and follow-up attention will be paid to the level of fiscal strength. Drawing on the volatile period after the first wave of gains at the bottom of history, the fundamentals were good, the upfront increase was small, and the defensive sector was more resilient. Structurally, technology and high-end manufacturing are the main line in the medium term. Specifically, we can focus on technological manufacturing with better fundamentals and high-end manufacturing with both supply and demand advantages.

Editor/Jeffy