① The People's Bank of China: plans to further enrich the product types of the "Swap Connect". ② The People's Bank of China and four other departments: will fully support technological innovation, focusing on early investment, small investments, long-term commitment, and hard technology. ③ The General Office and the State Council: will strengthen the construction and renovation of urban infrastructure and promote the construction of new urban infrastructure. ④ Powell forecasts the direction of adjustments to the monetary policy framework, warning that future inflation volatility may remain high.
Focus on hotspots.
1. The People's Bank of China, the Hong Kong Securities and Futures Commission, and the Hong Kong Monetary Authority, based on a thorough summarization of the operational experience of "Swap Connect" and careful listening to suggestions from domestic and foreign investors, plan to further enrich the product types of "Swap Connect".
First, extend the contract period, extending the interest rate swap contract period to 30 years, to meet the diverse risk management needs of market institutions; second, expand the product spectrum, launching interest rate swap contracts that use the loan market quotation rate as the reference interest rate. The financial market infrastructure institutions of both places will gradually launch the above optimization measures.
Next, the financial management departments of the mainland and Hong Kong will continue to guide the financial market infrastructure institutions in both places, based on the operational situation of "Swap Connect", to continue improving relevant mechanism arrangements, steadily promoting the further opening up of China's financial market, cautiously and solidly advancing the internationalization of the RMB, and supporting the flourishing development of Hong Kong as an international financial center.
2. The People's Bank of China, the Ministry of Science and Technology, the Financial Regulatory Administration, and the China Securities Regulatory Commission jointly held a working exchange meeting on technology finance on May 15. Pan Gongsheng, President of the People's Bank of China, Yin Hejun, Minister of Science and Technology, Xiao Yuanqi, Deputy Director of the Financial Regulatory Administration, and Li Ming, Vice Chairman of the China Securities Regulatory Commission attended the meeting and spoke. The meeting emphasized that financial management departments, technology departments, and financial institutions should deeply implement the decisions and deployments of the Party Central Committee and the State Council, detail and implement various policy measures to build a technology financial system, and explore the establishment of a mechanism that matches technological innovation, providing comprehensive support for technological innovation, with a focus on early-stage investments, small investments, long-term commitments, and hard technology.
3. The General Office and the State Council issued "Opinions on Continuing to Promote Urban Renewal Actions." Promote the renovation and transformation of old urban residential communities; strengthen the construction and renovation of urban infrastructure; steadily advance the renovation of hazardous housing; the central government should support the implementation of urban renewal actions.
4. On Thursday evening Beijing time, Federal Reserve Chairman Powell spoke at the headquarters in Washington, forecasting potential adjustments to the Federal Reserve's monetary policy framework.
The Federal Reserve is conducting its first review of the monetary policy framework since 2020, aiming to incorporate lessons from the inflation surge in 2021 and the subsequent aggressive interest rate hikes. The previous policy framework was also viewed as one of the reasons for the Fed's "slow actions" that year.
As part of a public consultation, the Federal Reserve Board is holding the "Second Thomas Laubach Research Conference" this Thursday to Friday, inviting external experts and scholars to engage with officials. The Federal Reserve expects to complete the policy assessment by the end of summer this year, with a potential release period around the end of August during the Jackson Hole Annual Meeting.
Powell emphasized that the economic environment has changed significantly since 2020, and the latest assessment will reflect the evaluation of these changes. He also stated that with the rise in real interest rates, future inflation volatility may be higher than in the 2010s, and the world is entering a period of "more frequent supply shocks that could be more persistent." In addition, he specifically pointed out that the 2% inflation target will not change.
Global Markets
In the US stock market, at the close, the Dow Jones Industrial Average rose by 0.65%, closing at 42,322.75 points; the S&P 500 Index rose by 0.41%, closing at 5,916.93 points, the highest closing price since March 3; the Nasdaq Composite Index fell by 0.18%, closing at 19,112.32 points.
Major technology stocks retreated overall, with Microsoft up 0.23%, NVIDIA down 0.38%, Apple down 0.41%, Amazon down 2.42%, Google C down 0.85%, Meta down 2.35%, and Tesla down 1.4%. Broadcom rose 0.22%.
Most China Concept Stocks declined, with Alibaba falling by 7.57%, JD.com down by 3.86%, Tencent Music down by 3.71%, Baidu down by 3.58%, NIO down by 3.39%, New Oriental down by 2.61%, Xpeng down by 1.39%, PDD Holdings down by 0.88%, Li Auto down by 0.59%, and TAL Education down by 0.2%.
In the Hong Kong stock market, as of Thursday's close, the Hang Seng Index fell by 0.79%, closing at 23,453.16 points; the Technology Index fell by 1.56%, closing at 5,297.84 points; the Hang Seng China Enterprises Index fell by 0.97%, closing at 8,509.67 points.
In terms of market performance, most stocks in Network Technology, Gold, and Semiconductors weakened, while stocks in Toys and Film and Television Entertainment showed strong performance against the trend.
Company News
Alibaba-W (09988.HK): In the first quarter, revenue was 236.454 billion yuan, a year-on-year increase of 7%; net income attributable to shareholders was 12.382 billion yuan, a year-on-year increase of 1203%; adjusted net income was 29.847 billion yuan, a year-on-year increase of 22%. The Board of Directors approved the distribution of dividends, totaling approximately 4.6 billion US dollars.
NetEase-S (09999.HK): In the first quarter, net income was 28.8285 billion yuan, an increase of 7.4% year-on-year; net income was 10.301 billion yuan, a year-on-year increase of 34.94%.
KE Holdings-W (02423.HK): First-quarter total transaction amount is 843.7 billion yuan, a year-on-year increase of 34.0%; Net income is 0.855 billion yuan, a year-on-year increase of 97.9%; Adjusted net income is 1.393 billion yuan, approximately flat year-on-year.
Geely Automobile (00175.HK): released ZEEKR's first quarter performance for 2025, total vehicle deliveries were 0.114 million units, a year-on-year increase of 21.1%; vehicle sales revenue was 19.096 billion yuan, a year-on-year decrease of 38.4%; gross profit was 4.213 billion yuan, a year-on-year decrease of 33.8%.
FOURTH PARADIGM (06682.HK): In the first quarter, revenue was 1.077 billion yuan, a year-on-year increase of 30.1%; gross profit was 0.444 billion yuan, a year-on-year increase of 30.1%.
CHINA EAST AIR (00670.HK): In April, passenger capacity input increased by 9.66% year-on-year; passenger turnover increased by 15.56% year-on-year; the load factor was 85.37%, an increase of 4.36 percentage points year-on-year.
Air China Limited (00753.HK): In April, passenger capacity input increased by 5.3% year-on-year, and passenger turnover increased by 8.6% year-on-year. The average load factor was 81.3%, an increase of 2.5 percentage points year-on-year.
CHINA SOUTH AIR (01055.HK): In April, passenger capacity input increased by 8.83% year-on-year, passenger turnover increased by 12.14% year-on-year, and the load factor was 85.58%, an increase of 2.53 percentage points year-on-year.
China Shenhua Energy (01088.HK): The cumulative coal sales volume for the first four months was 0.1349 billion tons, a year-on-year decrease of 12.6%; coal sales volume in April was 35.6 million tons, a year-on-year decrease of 4%.
Metallurgical Corporation of China (01618.HK): The value of newly signed contracts in the first four months was 308.4 billion yuan, a year-on-year decrease of 24.9%, among which overseas contract value was 19.29 billion yuan, a year-on-year decrease of 7.7%.
Green Tea Group (06831.HK): The public offering in Hong Kong was oversubscribed by 317.54 times, with a final issue price of HKD 7.19 per share.
Lao Pu Gold (06181.HK): Completed the issuance of 4.31 million placement shares.
