This week (October 23-27), China will release profit data for industrial enterprises above designated size for September. Overseas, the United States will release real GDP data for the third quarter, the European Central Bank will announce a new round of interest rate decisions, and multiple countries will release October PMI data. This week, three new shares will be subscribed to in the Shanghai and Shenzhen stock markets, and the ban on restricted shares with a market value of over 82.9 billion yuan will be lifted. In addition, this week, the central bank's open market will have over 1.4 trillion yuan of reverse repos maturing.
October 23rd (Monday)
September Chicago Federal Reserve National Activity Index
Initial Consumer Confidence Index for October in the Eurozone
October 24th (Tuesday)
Initial Markit Comprehensive PMI for October in the United States
Initial comprehensive PMI for October in France
Initial comprehensive PMI for Germany in October
Initial comprehensive PMI for the Eurozone in October
Initial comprehensive PMI for October in the UK
Initial value of Japan's October comprehensive PMI
October 25th (Wednesday)
New home sales in the United States in September compared to the previous month
Changes in EIA gasoline inventory for the week of October 20th in the United States (10000 barrels)
Australia's Q3 CPI data
Eurozone September M3 Money Supply YoY
October 26th (Thursday)
Eurozone European Central Bank deposit facility rate
Eurozone ECB Marginal Loan Rate
Eurozone European Central Bank's main refinancing rate
Initial value of annualized quarter on quarter real GDP in the third quarter of the United States
Number of first applications for unemployment benefits in the week of October 21st in the United States (10000 people)
GDP data for South Korea in the third quarter
US September Commodity Trade Account (100 million US dollars)
October 27th (Friday)
Profit data of industrial enterprises above designated size in China in September
Core PCE Price Index for September in the United States
Final Value of the University of Michigan Consumer Confidence Index for October in the United States
This week, the ban on restricted shares with a market value exceeding 82.9 billion yuan was lifted in the Shanghai and Shenzhen stock markets
According to Wind data, a total of 66 companies in the Shanghai and Shenzhen stock markets were gradually lifted from restricted shares this week (October 23-27), with a total of 5.316 billion shares lifted. Based on the closing price on October 20th, the total market value of the lifted shares was 82.916 billion yuan. The top three stocks in terms of market value after lifting the ban are Changjiang Electric Power (17.979 billion yuan), Xiamen Bank (7.877 billion yuan), and Changan Automobile (7.287 billion yuan).
Specifically, on October 24th, Changjiang Electric Power will lift the ban on 804 million shares and allocate shares for targeted issuance institutions; On October 26th, Changan Automobile will lift the ban on 515 million shares and allocate shares to targeted issuance institutions; On October 27th, Xiamen Bank will lift the ban on 1.448 billion shares, making it the original shareholder's restricted shares for the first time.
1. Central Bank Governor Pan Gongsheng: Further promote the implementation of policy measures to activate the capital market and boost investor confidence
On October 21st, Pan Gongsheng, the President of the People's Bank of China, stated in his report on financial work since the fourth quarter of 2022 that efforts should be made to maintain the stable operation of the financial market, further promote the implementation of policy measures to activate the capital market and boost investor confidence, and work together from the investment, financing, trading, and reform sides to continuously stimulate market vitality. Steadily resolve the bond risks of large real estate enterprises, and strengthen the monitoring, warning, and prevention of urban investment bond risks. Stabilize expectations and prevent overshoots, strengthen the management of the foreign exchange market through the combination of macro prudential and micro regulatory measures, play a decisive role in the formation of exchange rates, maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, prevent the risk of abnormal fluctuations in cross-border funds, and maintain the stable operation of the foreign exchange market. Guide and stabilize the behavior and expectations of the financial market, take timely measures based on the market situation, prevent risk contagion in the stock market, bond market, and foreign exchange market, and ensure the stable operation of the financial market. (Securities Times)
2. The China Securities Regulatory Commission plans to strengthen the constraints on abnormally high proportion dividend paying enterprises and guide reasonable dividend distribution
Recently, the China Securities Regulatory Commission publicly solicited opinions on regulatory documents such as the "Guidelines for the Supervision of Listed Companies No. 3- Cash Dividends for Listed Companies (Revised in 2023)" for cash dividends. The main idea of the revision of the cash dividend rules this time is to adhere to the company's autonomy, encourage the company to formulate clear dividend policies in the articles of association, stabilize investors' dividend expectations, and supervise dividend distribution by strengthening disclosure requirements for companies that do not distribute dividends or have a large financial investment scale but a low dividend ratio; Facilitate the company's mid-term dividend implementation procedures and encourage the company to increase the frequency of cash dividends; Strengthen the constraints on abnormally high proportion dividend paying enterprises and guide reasonable dividend distribution. It is emphasized that when formulating cash dividend policies, listed companies should comprehensively consider their own profitability, capital expenditure arrangements, and debt repayment ability, taking into account investor returns and company development. Maintain a focus on companies with high asset liability ratios and poor cash flow from operating activities, with a large proportion of cash dividends, to prevent adverse effects on the production, operation, and debt paying ability of the enterprise. (China Securities Regulatory Commission website)
3. Three stock exchanges will officially launch the acceptance and review of corporate bonds
On October 20th, according to relevant arrangements, the China Securities Regulatory Commission and its relevant institutions issued a package of institutional rules related to corporate bonds (including corporate bonds). On the same day, the Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange announced that they will officially start the acceptance and review of corporate bonds from 9:00 am on October 23, 2023. At the same time, the Beijing Stock Exchange will take this opportunity to promote the construction of the credit bond market, gradually establish a basic institutional framework for the credit bond market, and promote the construction of the Beijing Stock Exchange bond market. (Xinhua News Agency)
4. Ministry of Industry and Information Technology: Focus on promoting breakthroughs in large model algorithm technology and improving the computing power level of intelligent chips
On October 20th, the State Council Office held a press conference on the development of industry and information technology in the first three quarters of 2023. Tao Qing, spokesperson for the Ministry of Industry and Information Technology and director of the Operation Monitoring and Coordination Bureau, stated that the next step will be to highlight key areas, vigorously promote the digital transformation of the manufacturing industry, and promote the innovative application of artificial intelligence. Mainly focus on the following four aspects. One is to strengthen the foundation of artificial intelligence technology. Through major scientific and technological innovation projects, we will focus on promoting fundamental and original technological breakthroughs in large model algorithms, frameworks, and other fields, improving the computing power level of intelligent chips, unleashing data value, and strengthening the research and development of "root" technologies. The second is to promote the intelligent upgrading of key industries. Accelerate the intelligence of the entire manufacturing process. Deepen the integration and application of artificial intelligence technology in the entire manufacturing process, and significantly improve the level of intelligence in research and development, pilot production, production, service, management, and other links. Promote the pilot demonstration of artificial intelligence, expand characteristic application scenarios, accelerate the "intelligent transformation and digital transformation", form real productivity, and improve the quality and efficiency of manufacturing development. The third is to promote the development of intelligent products and equipment. Utilize the strong cognitive, interactive, and generative characteristics of large models, promote the upgrading and iteration of high-end equipment, key software, and intelligent terminals, and enhance the intelligence level of key products and equipment. The fourth is to strengthen the construction of supporting service systems. Accelerate the cultivation of a group of industry leading enterprises and "specialized, refined, and innovative" small and medium-sized enterprises, and form a group of ecological innovation consortia. Deepen international exchanges and cooperation in technology research and development, standard development, ethical governance, and talent cultivation, and collaborate to create a good artificial intelligence industry ecosystem. (China Net)
5. Opening of financialized bonds: with state-owned major players as the main players, urban investment bonds are included in the replacement target
The curtain of debt consolidation is slowly beginning. As of October 19th, the scale of special refinancing bonds issued and to be issued in 20 places has reached 910.4 billion, used to replace outstanding payments, non-standard and loans included in implicit debts. However, local balance limits are limited, so financial measures are also needed to mitigate local debt risks. The reporter learned from multiple banking professionals that the financial system, especially banks, has recently started supporting the resolution of local debts. The participation of banks in the resolution of local bonds can be roughly divided into two situations: firstly, extending the loan term and reducing interest rates of the bank; The second is debt replacement. In fact, since 2019, financial institutions have been mitigating implicit debt risks through rollover swaps, but there are many limitations. The new round of renewal and replacement presents new characteristics: firstly, the scope of renewal and replacement has been expanded; The second is mainly involving state-owned banks; Thirdly, there has been a change in the form of replacement. Previously, maturing debts could be replaced through loans, urban investment bonds, and asset management products, but the new round of replacement mainly involves replacing maturing urban investment bonds and non-standard bonds through loans. (21st Century Economic Report)
6. This week, the central bank's open market will have over 1.4 trillion yuan of reverse repos due
According to Wind data, there will be 1454 billion yuan of reverse repos due in the open market of the central bank this week, with 106 billion yuan, 71 billion yuan, 105 billion yuan, 344 billion yuan, and 828 billion yuan due from Monday to Friday, respectively. In addition, on Wednesday (October 25th), there were 5 billion yuan of central bank note swaps due. The Ministry of Finance and the Central Bank have previously announced that they will conduct a bidding process for 50 billion yuan 1-month treasury cash deposit on October 24th.
This week, three A-shares will be issued and subscribed, with two being new shares on the Shanghai Stock Exchange Main Board and one being new shares on the Shenzhen Stock Exchange.
Caixin Securities
Compared with overseas equity market and Chinese bond market, A-share market has strong allocation value. At present, the combination of the "W-shaped bottom", "secondary bottom", and high-frequency economic data inflection points in the A-share market has significantly increased the probability of a midline level rebound in the fourth quarter.
Focus section:
1) Artificial intelligence sector, with a focus on games and optical modules;
2) Huawei's industrial chain, with a focus on Huawei cars and Huawei smartphones;
3) Policy boosting pro cyclical sectors, focusing on building materials and securities firms;
4) Performance driven consumption sector, such as Baijiu and pig breeding sector;
5) Undervalued growth sectors, such as biopharmaceuticals and new energy.
Bohai Securities
The unexpected validation of economic data confirms the strengthening of fundamental support. Although the market is also concerned about the short-term necessity of future incremental policies, we believe that the overall increase or decrease of policies is based on whether the economy can achieve healthy growth. So, the lower the necessity of policies, the higher the health of fundamentals, which is beneficial rather than negative for the market. Against the backdrop of stabilizing economic fundamentals, we can focus on thematic opportunities where performance stability drives up market risk preferences.
Focus section:
1) Real estate chain (home appliances, steel and building materials);
2) Large financial sector (banking, non banking finance);
3) The TMT sector (communication, computer media, electronics) is driven by the concepts of new industrialization, Microsoft's big model, and Huawei's independent and controllable capabilities.
HUATAI SECURITIES
Recently, policies and industrial catalysts have been intensive, and it is recommended to pay attention to the strategic grasp and tactical opportunities of new industrialization.
Focus section:
1) Artificial intelligence: Big models support the development of AGI, and domestic model capabilities are showing a rapid optimization trend;
2) Embodied intelligence: Tesla Bot's commercialization is accelerating, and there is an increasing demand for motion modules, computing power chips, and machine vision software and hardware;
3) Metaverse: The Ministry of Industry and Information Technology and other departments have launched the first national level industrial policy, leading to a rebound in investment and financing in the primary market;
4) Intelligent driving: L3 is in the introduction phase, and L4 is advancing in specific commercial scenarios. The penetration rate of key components is at a "singularity moment";
5) 6G& Satellite Internet: Policy supports the development and application of 6G, driving the commercialization of satellite Internet. Huawei Mate 60 supports continuous catalysis such as satellite calls.
Dongfang Securities
For the A-share market, we continue to maintain the view that the market is in the process of bottoming out. Although overseas risks continue to accumulate, the recovery of domestic industrial added value, PMI and other data shows that China's economy has great resilience, but overall improvement will take time. The stock market policy is proactive, hedging against uncertainty. In the fourth quarter of this year, the market may have reached a bottom and entered a new pattern.
Focus section:
1) High dividend and low value sectors: petroleum and coal, operators, banks, Baijiu, transportation, textile and clothing, etc;
2) Digital economy related sectors: computing power, data elements, semiconductor industry chain, etc;
3) Manufacturing related sectors: automobiles, home appliances, robots, etc.
(Statement: The content is for reference only and does not constitute investment advice. Investors will operate accordingly and bear the risk themselves)