In early trading, the Hong Kong A-share market weakened at one point, but the support below was also strong. As of press time, $Hang Seng Index (800000.HK)$ the decline narrowed to 0.09%, $Hang Seng TECH Index (800700.HK)$ up nearly 1%.

In the morning, the market received three major bullish news:

Firstly, according to a report from the Yuyuantan of the China Central Broadcasting - TV, during the World Bank/International Monetary Fund Annual Meetings on October 25, the Sixth Meeting of the China-US Economic Working Group was held. During the exchange on 'macroeconomic situations and policies of the two countries', China revealed new trends in its economic policies. China stated that a large-scale comprehensive policy package will be announced after the statutory procedures are expected to be completed in November.

Secondly, recently, the Jiangxi Provincial People's Government issued a notice on 'Several Measures for Fully Implementing the National Package Incremental Policy to Promote the Continuous Recovery of the Provincial Economy,' which put forward 25 plans and requirements.

Third, the steel sector has suddenly emerged. The China Iron and Steel Industry Association stated that it will accelerate the research and promotion of production capacity governance and joint restructuring, with continuous industrial integration speeding up.

Weighty Signal

Just now, Yu Yuan Tan Tian reported that on October 25th, during the World Bank/International Monetary Fund Annual Meeting, the 6th meeting of the China-US Economic Working Group was held. During the exchange on 'the macroeconomic situations and policies of the two countries,' China also revealed the new direction of its economic policies, stating that the large-scale package incremental policy is expected to be officially announced in November after the statutory procedures.

The Ministry of Finance website reported on October 27 that Deputy Minister of Finance Liao Min stated at the 110th meeting of the World Bank Development Committee in 2024 that China will intensify the countercyclical adjustment of fiscal policies, implement a series of powerful measures, and is confident in achieving an annual economic growth target of around 5%. On October 25, the World Bank held the 110th meeting of the Development Committee in Washington, USA, focusing on topics such as World Bank reforms, the 21st replenishment of the International Development Association, and approved the report 'Towards the Future of the World Bank Group.'

Liao Min stated that the recent package incremental policy introduced by the Chinese government has received widespread attention from the international community. In addition to monetary policy, China will also increase the intensity of countercyclical adjustment of fiscal policies. It will implement a series of strong measures in resolving local government debt, stabilizing the real estate market, increasing the income of key groups, ensuring people's livelihoods, promoting equipment renewal, and implementing old-for-new exchanges for consumer goods. Through government expenditures to leverage social investment, stimulate consumption, and increase effective demand. China is confident in achieving an annual economic growth target of around 5% and will continue to inject momentum into global economic growth.

Jiangxi Empowers

Local areas are also starting to empower. According to the Jiangxi Provincial People's Government website, recently, the Jiangxi Provincial People's Government issued a notice regarding 'Several Measures for Fully Implementing the National Package Incremental Policy to Promote the Continuous Recovery of the Provincial Economy.'

The notice puts forward 25 plans and requirements. The notice emphasizes the need to accelerate project construction progress. Strengthen the advancement mechanism for major projects, adopt bi-weekly scheduling, one project one plan, etc., to speed up the construction progress of large and medium-sized projects in the province, and the progress of special bonds, additional issuance of national bonds, and the allocation of ultra-long-term special national bond funds, to ensure that the investment amount reaches 1 trillion yuan by 2024. Accelerate the construction of Changjiu High-Speed ​​Rail, Ruimei Railway, Shanggao Power Plant, Xinfeng Power Plant Phase II, Leping Water Conservancy Hub, and other projects, complete and operate major projects such as the Dagguang Expressway Ji'an to Nankang four upgrades, Nanchang West Second Ring Expressway, Ganfeng Lithium Battery Phase IV's 15GWh new power battery, etc., start construction of new projects like Changbei Airport Phase III expansion project, Changgan High-Speed ​​Rail, and speed up the commencement of projects such as Nanchang North Second Ring Expressway, Yiyang to Nanfeng Expressway, Yuanhe Channel Improvement.

Do a good job in two "100 billion yuan" strive works. Focus on the national early issuance of next year's 100 billion yuan central budget investment plan within the year, highlight the selection of projects in areas such as urban underground pipe networks and facilities construction, key basin comprehensive water environment management, social, water conservancy, agriculture, forestry, energy conservation and carbon reduction, pollution control, etc.; focus on the early issuance of 100 billion yuan in "two heavy" construction project funds within the year by the country, conduct good project selection work based on the corresponding fields, actively communicate and coordinate, and actively strive for more national support.

On October 23, the Eighth Meeting of the Sichuan Provincial Party Committee's Finance and Economic Committee was held, chaired and addressed by Wang Xiaohui, Secretary of the Provincial Party Committee and Director of the Provincial Party Committee's Finance and Economic Committee. He emphasized the need to fully implement the recent comprehensive incremental policies of the Party Central Committee and the State Council, anchor the target, work hard in the fourth quarter, strive to complete the annual economic and social development goals and tasks, and resolutely shoulder the responsibility of being a major economic province. On October 8, the Sichuan Provincial Government held an expanded meeting of the Party Group, requesting to "strengthen project packaging reserves for the upcoming larger-scale ultra-long-term special national bonds, early issuance of next year's central budget investment plan and other policies proposed by the country, carry out in-depth and solid preliminary work, and strive for a greater share of support.

Industry empowerment

This morning, the steel sector saw a sharp rise across the board, $CHONGQING IRON (01053.HK)$ rising nearly 46%, $MAANSHAN IRON (00323.HK)$ rose nearly 15%, $CHINAVTM MINING (00893.HK)$ Up over 13%. $IRC (01029.HK)$ In terms of news, the iPhone 16 series is expected to be released in September 2024 and may be officially unveiled on September 10. Soochow Securities' research report also pointed out that with August entering the peak season for iPhone new component stocking, production and delivery are expected to accelerate, and the market is highly concerned about the launch of the iPhone 16 series in September.

Recently, the China Iron and Steel Industry Association stated that it will accelerate research and promote capacity governance and joint restructuring. The CISA has started to speed up related research, conduct special surveys, and put forward a package of related policy recommendations to promote joint restructuring and improve exit mechanisms.

CISA stated that currently, joint restructuring and phased-out capacity exit channels both require policy support. On one hand, in August, the Ministry of Industry and Information Technology has temporarily suspended the announcement of new steel capacity replacement projects, blocking the entry of new capacity; on the other hand, existing capacity exit mechanisms must be established quickly to guide the phased-out capacity exit, promote the direction of steel production towards advantageous capacity. At the same time, resolutely promote joint restructuring to prevent a large amount of ineffective capacity or even 'zombie capacity' from resurrecting during the restructuring process. This task is arduous and requires joint efforts from the government, enterprises, and the industry. CISA has begun to accelerate related research, carry out special surveys, and put forward a package of related policy recommendations to promote joint restructuring and perfect exit mechanisms.

Lai Fuyang of Sinosteel Futures stated that in the first half of last week, affected by environmental pressure in some regions and rainy weather, end demand slowed down. The apparent data for rebar in this period is 2.435 million tons, a week-on-week decrease of 0.143 million tons. However, since the second half of the week, the market has intensified speculation on the content of the domestic important meetings next week, and bullish sentiment has gradually increased. From a medium-term perspective, China's macro policies have shown a clear shift, and the probability of a sharp drop in black commodity prices at the macro level is relatively limited. With the gradual implementation of fiscal policies, the steel sector is expected to stabilize.

Similar to steel, there is also the new energy industry such as photovoltaics. Some analysts believe that the market may see a supply-side reform rally similar to that of 2017.

Editor/Somer