2 1 Shi Ji Jing Ji Bao Dao·2025-05-30 06:17Core Viewpoint - The banking sector is experiencing a strong rally, with significant price increases and multiple stocks reaching historical highs, driven by macroeconomic factors and changes in fund management strategies [1][2][3]. Group 1: Banking Sector Performance - The banking sector rose by 0.95% on the last trading day before the Dragon Boat Festival, with a year-to-date increase of 9.6% [2]. - All 42 bank stocks in the sector closed in the green, with notable gains from CITIC Bank, Chongqing Rural Commercial Bank, and others, where CITIC Bank saw the highest increase of 3.12% [2]. - Hangzhou Bank and Chengdu Bank reached new historical highs, with prices hitting 16.58 yuan and 19.46 yuan respectively [2]. Group 2: Investment Trends and Fund Management - The strong performance of bank stocks is attributed to their defensive characteristics amid a complex global economic environment, making them attractive to risk-averse investors [2][3]. - Recent regulatory changes by the China Securities Regulatory Commission emphasize performance benchmarks for fund managers, which may lead to increased allocations to bank stocks as managers seek to align with benchmarks [3]. - Currently, the proportion of bank holdings in active funds is only 3.81%, while the weight of the banking sector in the CSI 300 index is 13.67%, indicating a significant deviation that may prompt fund managers to increase their bank stock holdings [3]. Group 3: Convertible Bonds and Market Dynamics - The rise in bank stock prices has alleviated the issue of low conversion rates for bank convertible bonds, with Hangzhou Bank opting for early redemption of its convertible bonds [5]. - Suzhou Bank also triggered early redemption of its convertible bonds, with a redemption price of 101.35 yuan per bond, reflecting a broader trend in the banking sector [6]. - The market for bank convertible bonds is expected to shrink significantly, with only 10 remaining in circulation and no new issuances since 2023, leading to a potential "gap" in the market [7].