Core Viewpoint - The article discusses the investment strategies and portfolio adjustments of Zhang Kun, a prominent fund manager at E Fund, highlighting his recent stock selections and the implications for potential investment opportunities in the market [4][28]. Group 1: Fund Adjustments and Holdings - Zhang Kun has initiated positions in several "potential stocks" including New Industries, NetEase Cloud Music, and Moore Threads-U, while significantly increasing his stake in Hong Kong Exchanges by 200% [4][9]. - E Fund's internal employees have reduced their holdings in Zhang Kun's managed funds, with the largest reduction being over 905,000 units in the E Fund Asia Select fund [4][5]. - As of the end of 2025, the total assets under Zhang Kun's management have decreased to approximately 48.383 billion [6]. Group 2: Key Stock Holdings - The E Fund Blue Chip Select fund held 54 stocks at the end of 2025, with the top ten unchanged, including Tencent Holdings and Kweichow Moutai, while new potential stocks were revealed in the 11th to 20th positions [7][10]. - The hidden key stocks for the E Fund Blue Chip Select include New Industries, Huatai Medical, and NetEase Cloud Music, all of which are newly established positions [8][13]. - The E Fund Quality Enterprise fund also increased its holdings in Hong Kong Exchanges and established new positions in New Industries and NetEase Cloud Music [11][12]. Group 3: Market Insights and Future Outlook - Zhang Kun noted a significant market characteristic in 2025, where investor concerns about domestic demand and consumption have shifted from tactical avoidance to strategic skepticism, indicating a potential long-term concern [28]. - He highlighted a divergence in the market, where companies are generating free cash flow while stock prices reflect pessimistic expectations, suggesting this could present significant investment opportunities [28][29]. - The current portfolio is characterized by "high certainty of basic returns" and "free call options," with expectations of upward revisions in earnings and valuations once the domestic economy stabilizes [28][29].

Core Viewpoint - The Hong Kong Securities and Futures Commission (SFC) announced that the paperless securities market system is expected to be implemented on November 16, 2026, enhancing market efficiency and aligning with global best practices [1][3]. Group 1: Implementation Progress - The Hong Kong Stock Exchange (HKEX) has been preparing for the transition to a paperless securities market since May 2025, providing market participants and issuers with updated reference materials [1]. - The systems and processes related to the paperless securities market at HKEX and relevant share transfer offices are in the late stages of development and testing, with market participants invited to participate in testing in the coming months [2]. - The SFC has reviewed and approved HKEX's proposed amendments to multiple rules and operational procedures necessary for the implementation of the paperless securities market [2]. Group 2: Market Education and Communication - To deepen market understanding of the new system and its impacts, multiple documents have been published, and several briefings have been held, with ongoing efforts to enhance public awareness [2][4]. - The SFC plans to submit a notice of the effective date to the Legislative Council in the second quarter of 2026 to ensure the legal framework for the paperless securities market is established [3]. Group 3: Transition Details - New securities listed after the implementation date must be issued in paperless form, while existing securities will transition to the paperless system over five years, with issuers notified in advance [3]. - The current nominal holder structure in the Central Clearing and Settlement System will remain, with limited modifications to the processes for depositing and withdrawing securities [4]. - Intermediaries are encouraged to collaborate closely with HKEX to prepare for the new system, as adjustments to their business models and operational processes may be necessary [4].

Core Insights - The Hong Kong Stock Exchange (HKEX) has signed a memorandum of understanding with the Malaysian Stock Exchange to enhance cooperation between the two capital markets, focusing on dual listings, ETFs, index and investment product development, Islamic finance, and carbon markets [1] - A new joint index, the HKEX-Malaysian Stock Exchange Large Cap Index, has been launched to help investors capture cross-market opportunities, tracking the performance of 60 top companies listed in Hong Kong and Malaysia, with a composition of 30 stocks from each market [1] - The collaboration aims to improve market vitality, expand opportunities for listed companies and investors, and enhance Malaysia's visibility in the global investment landscape [1] Company and Industry Summary - The HKEX CEO emphasized the importance of strengthening connections with markets across Asia as part of the strategic goal to build a diversified asset ecosystem and attract more international capital to Asia amid increasing macroeconomic uncertainties [1] - The Malaysian Stock Exchange CEO highlighted that the collaboration with HKEX is crucial for the exchange's growth, especially in the context of increasing global market volatility and the rapid movement of capital across regions [1] - Currently, there are 103 Southeast Asian companies listed on the HKEX, with 30 of them being Malaysian companies, indicating a significant presence of Malaysian firms in the Hong Kong market [2]

Core Viewpoint - Bursa Malaysia and Hong Kong Exchanges and Clearing Limited (HKEX) are enhancing cross-border market connections through a new large-cap index and a cooperation agreement aimed at fostering investment opportunities between the two markets [1][2]. Group 1: Index and Cooperation Agreement - The HKEX Bursa Malaysia Large Cap Index features 30 large-cap companies from Malaysia and 30 from Hong Kong, designed to strengthen capital market links and support future cross-market investment opportunities, including ETFs [1][2]. - The agreement includes plans to streamline dual listing pathways, co-develop market-driven indexes, improve access to and promotion of ETFs, facilitate the development of Shariah-compliant securities, and collaborate in carbon markets [2]. Group 2: Strategic Importance - Dato' Fad'l Mohamed, CEO of Bursa Malaysia, emphasized that this collaboration aims to enhance market vibrancy, expand opportunities for public listed companies (PLCs) and investors, and improve Malaysia's visibility in the global investment landscape [3][4]. - Bonnie Y Chan, CEO of HKEX, stated that expanding engagement with the region is a strategic priority, focusing on building a multi-asset product ecosystem to attract global liquidity to Asia amid macro uncertainties [4]. Group 3: Index Composition - The Malaysian component of the index consists of blue-chip stocks from sectors such as consumer products and services, financial services, utilities, and telecommunications and media [5]. - The Hong Kong constituents are large-cap companies eligible for Southbound trading [6].

Investment Rating - The report does not explicitly state an overall investment rating for the financial industry but provides specific recommendations for various sectors and companies within the industry [4]. Core Insights - The financial industry experienced a decline this week, with the non-bank financial index down by 3.98%, underperforming the CSI 300 index by 2.57 percentage points. The banking sector, however, showed resilience with a decline of only 0.71%, outperforming the CSI 300 index by 0.7 percentage points [10][1]. - The insurance sector reported significant profit growth driven by investments, although Q4 results were impacted by stock market volatility. The long-term fundamentals of the insurance industry remain intact, suggesting potential for valuation and performance recovery [1][17]. - The brokerage sector saw a 3.61% decline, with 14 listed brokerages reporting a combined revenue of 271.68 billion yuan and a net profit of 109.02 billion yuan, reflecting year-on-year increases of 37.7% and 54.8%, respectively [2][18]. - The banking sector's performance showed marginal improvement, with 13 listed banks reporting revenue and net profit growth of 0.85% and 1.08%, respectively. The net interest income is expected to stabilize, contributing to a more favorable outlook for 2026 [3][21]. Summary by Sections Insurance Sector - The insurance sector index fell by 5.52%, underperforming the CSI 300 index by 4.11 percentage points. The annual reports of listed insurance companies showed significant profit growth driven by investments, with notable Q4 declines due to market fluctuations [1][14]. - The net profit growth for major insurers was led by China Taiping (+221%), followed by China Life (+44%) and New China Life (+38%). The new business value (NBV) also saw substantial increases across the board [14][17]. - Recommendations include China Ping An, China Taiping, and New China Life, with a focus on long-term value recovery in the sector [4][17]. Brokerage Sector - The brokerage sector index decreased by 3.61%, with a reported combined revenue of 271.68 billion yuan and a net profit of 109.02 billion yuan from 14 listed brokerages, indicating strong recovery driven by market conditions [2][18]. - The return on equity (ROE) for these brokerages improved by 1.56 percentage points to 7.5%. The report suggests that the brokerage sector is experiencing a significant recovery in profitability [18][19]. - Recommended stocks include Guotai Junan, Huatai Securities, and Xingye Securities, focusing on firms with strong fundamentals and potential for mergers and acquisitions [4][19]. Banking Sector - The banking sector index fell by 0.71%, with 13 listed banks reporting revenue and net profit growth of 0.85% and 1.08%, respectively. The net interest margin is expected to stabilize, contributing to a positive outlook for 2026 [3][21]. - The report highlights that the asset quality remains stable, with a slight decrease in the non-performing loan ratio to 1.21% and an average provision coverage ratio of 232% [22][24]. - Recommended banks include Hangzhou Bank and Bank of China (H), with a focus on banks with high dividend yields and strong earnings potential [4][24].

Investment Rating - The report maintains an "Overweight" rating for the non-bank financial sector [1] Core Insights - The brokerage sector is expected to continue high growth in Q1, while insurance profits are under short-term pressure but show long-term investment value [1] - The non-bank financial sector has seen varied performance, with only the diversified financial sector outperforming the CSI 300 index recently [9][10] - The insurance industry is experiencing strong premium growth in the early months of 2026, despite some short-term challenges in the auto insurance segment [28][30] Summary by Sections Non-Bank Financial Sector Performance - In the recent five trading days (March 23-27, 2026), the diversified financial sector rose by 0.59%, while the securities and insurance sectors fell by 3.59% and 5.52%, respectively, leading to an overall decline of 4.07% in the non-bank financial sector [9] - Year-to-date performance shows the diversified financial sector down by 2.25%, insurance down by 10.78%, and securities down by 10.79% [10] Securities Sector Insights - Trading volume has increased, with the average daily stock trading amount reaching 29,231 billion yuan, a 64.07% increase year-on-year [14] - The margin financing balance reached 26,166 billion yuan, up 35.59% year-on-year [14] - The average price-to-book (PB) ratio for the securities industry is projected at 1.1x for 2026, indicating potential for further valuation improvement [24] Insurance Sector Insights - The total net profit of five listed insurance companies reached 4,252 billion yuan in 2025, a 22% increase year-on-year, despite a loss in Q4 [26] - The new business value (NBV) for life insurance has shown significant growth, with some companies reporting over 50% year-on-year increases [26][29] - The insurance sector's valuation is currently at 0.54-0.77 times the expected P/EV for 2026, which is considered historically low [33] Diversified Financial Sector Insights - The diversified financial sector's performance in 2025 was stable, with notable profit increases from major companies like Hong Kong Exchanges and Clearing [37] - The trust industry saw its asset scale grow to 32.43 trillion yuan, a 20.11% increase year-on-year [39] - The futures market maintained high transaction volumes, with innovative business directions being explored for future growth [37]

Investment Rating - The report maintains an "Overweight" rating for the non-bank financial sector [1] Core Insights - The brokerage industry is expected to continue high growth in Q1, while insurance profits are under short-term pressure but show long-term investment value [1] - The non-bank financial sector has seen varied performance, with only the diversified financial sector outperforming the CSI 300 index recently [9][10] - The insurance sector has shown strong premium growth in the first two months of 2026, despite short-term challenges in the auto insurance segment [28][30] Summary by Sections Non-Bank Financial Sector Performance - In the recent five trading days (March 23-27, 2026), the diversified financial sector rose by 0.59%, while the securities and insurance sectors fell by 3.59% and 5.52%, respectively, leading to an overall decline of 4.07% in the non-bank financial sector [9] - Year-to-date performance shows the diversified financial sector down by 2.25%, insurance down by 10.78%, and securities down by 10.79% [10] Securities Sector - Trading volume has increased, with the average daily stock trading amount reaching 29,231 billion yuan, a 64.07% increase year-on-year [14] - The margin financing balance reached 26,166 billion yuan, up 35.59% year-on-year [14] - The average price-to-book (PB) ratio for the securities industry is projected at 1.1x for 2026, indicating potential for quality brokerage firms to benefit from active capital market policies [24][25] Insurance Sector - The total net profit of five listed insurance companies reached 4,252 billion yuan in 2025, a 22% increase year-on-year, despite a loss in Q4 [26][29] - The first two months of 2026 saw a 9.7% year-on-year increase in original premium income for life insurance companies [28] - The insurance sector's valuation is currently at 0.54-0.77 times the expected P/EV for 2026, indicating a historical low and maintaining an "Overweight" rating [33] Diversified Financial Sector - The diversified financial sector showed stable performance in 2025, with major companies like Hong Kong Exchanges and Clearing reporting a 36% increase in net profit [37] - The trust industry saw its asset scale grow to 32.43 trillion yuan, a 20.11% increase year-on-year [39] - The futures market maintained high transaction volumes, with innovative business directions being explored for future growth [37]

Investment Rating - The report maintains a "Strong Buy" rating for the non-bank financial sector, indicating a positive outlook for investment opportunities in this area [2]. Core Insights - The Hong Kong stock market is experiencing a significant increase in trading activity, with the average daily turnover (ADT) reaching 272.3 billion HKD in January 2026, marking a year-on-year increase of 89% and a quarter-on-quarter increase of 46.4% [5][15]. - The total market capitalization of Hong Kong stocks reached 50.8 trillion HKD by the end of January 2026, reflecting a year-on-year growth of 43.6% and a quarter-on-quarter growth of 7.1% [5][15]. - The price-to-earnings (PE) ratio of the Hang Seng Index stood at 11.77 times as of January 31, 2026, placing it in the 89.15th percentile over the past five years, indicating a gradual recovery from previous undervaluation [5][21]. - The influx of southbound capital has significantly increased, with net inflows reaching 1.4 trillion HKD in 2025 and over 150 billion HKD in 2026, enhancing the pricing power of mainland investors [5][41]. - The IPO market in Hong Kong is showing signs of recovery, with 119 IPOs in 2025 raising a total of 127.9 billion HKD, and 13 IPOs already completed in January 2026 [5][15]. Summary by Sections 1. ADT Performance Review - The Hong Kong stock market has seen a notable increase in trading activity, with ADT reaching 272.3 billion HKD in January 2026, a significant increase from previous periods [15]. - The growth in ADT is attributed to both an increase in total market capitalization and turnover rate, indicating a robust market environment [15]. 2. Valuation Improvement and Market Capitalization - The valuation of Hong Kong stocks is gradually recovering, with the Hang Seng Index's PE ratio improving significantly, reflecting a narrowing of the AH premium to near six-year lows [5][21]. - The overall profitability of Hong Kong stocks is expected to grow, with a projected 9.06% increase in net profit to 5.39 trillion HKD in 2024 [5][40]. 3. IPO Activity and Market Dynamics - The IPO market is revitalizing, with a substantial number of new listings and a diverse pipeline of companies awaiting listing, particularly in technology and new consumption sectors [5][15]. - The A+H listing model is gaining traction, with a notable increase in the number of companies pursuing dual listings [5][15]. 4. Southbound Capital Inflows - Southbound capital's share in the market is increasing, contributing to a higher turnover rate and overall market activity [5][41]. - The daily average turnover from southbound trading reached 1.2 billion HKD in January 2026, maintaining a significant proportion of the overall market activity [5][41]. 5. Derivatives Market Growth - The derivatives market is experiencing record trading volumes, with innovative products being introduced to meet market demands [6][15].

Group 1 - The core viewpoint of the article revolves around the investigation of Ba Shusong, the former Chief Economist of the Hong Kong Stock Exchange (HKEX), and his departure from the organization [1] - Ba Shusong joined HKEX in April 2015 as Chief Economist and Managing Director, and he was last reported to have left the organization by the end of 2025 [1] - Ba Shusong was still active in his role as of October 22, 2025, when he participated in the "China Opportunities Forum" held by HKEX in Shanghai [2] - By March 2026, Ba Shusong's name was no longer listed in the management roster of HKEX's 2025 annual report [3]

Investment Rating - The report provides a "Buy" rating for the non-bank financial sector, indicating an expected performance that will exceed the market by more than 10% over the next 12 months [36]. Core Insights - The report emphasizes the importance of strengthening market stability mechanisms and suggests focusing on left-side opportunities within the sector. It highlights that external risk events may fluctuate, but the market's resilience remains strong, with a trend of incremental capital inflow expected to continue [5]. - The introduction of the Financial Law draft is seen as a significant step towards enhancing regulatory frameworks and promoting high-quality development in the financial sector. This law aims to strengthen supervision, prevent risks, and support long-term growth [16][17]. - The insurance sector is advised to be actively monitored, as it continues to increase its equity investment ratio despite market downturns. The report notes that the solvency ratio of life insurance companies remains robust, providing a buffer against potential market pressures [13][5]. Summary by Sections 1. Market Performance - As of March 21, 2026, the Shanghai Composite Index fell by 3.38%, while the Shenzhen Component Index decreased by 2.90%. The CSI 300 Index dropped by 2.19%, and the ChiNext Index rose by 1.26% [10]. 2. Industry Dynamics and Weekly Commentary (a) Insurance - The report indicates that the insurance sector is guided by the two sessions to pursue high-quality development. The solvency ratio of life insurance companies is at 115%, significantly above the regulatory threshold of 50%, allowing for continued investment in equities [13]. - The proportion of insurance funds allocated to stocks and funds has increased to 14.8%, up by 2.1 percentage points from the previous year. The report suggests that the current valuation of the insurance sector presents a good cost-performance ratio [13]. (b) Securities - The Financial Law draft aims to enhance financial regulation and promote high-quality development. It establishes a comprehensive legal framework for financial activities, emphasizing risk prevention and regulatory clarity [16][17]. - The report notes that the Hong Kong Securities and Futures Commission has reported a significant increase in the virtual asset market, with a daily trading volume increase of 89.5% year-on-year, indicating a growing market and regulatory framework [21][23]. 3. Key Company Valuations and Financial Analysis - The report includes detailed valuations for key companies in the sector, with several companies rated as "Buy," including China Ping An, China Life, and Huatai Securities, among others. The expected earnings per share (EPS) and price-to-earnings (PE) ratios for these companies indicate strong growth potential [6].