GF SECURITIES·2026-01-19 02:46Investment Rating - The industry investment rating is "Buy" [2] Core Views - December saw a record high in both cross-border net inflow and net settlement scale, with the bank's foreign-related payment surplus reaching 801.1 billion CNY, a year-on-year increase of 400.2 billion CNY [14][17] - The arbitrage trading return rate declined significantly, influenced by the depreciation of the US dollar against the offshore RMB, which fell by 1.32% to 6.98 [14][17] - The cross-border funds' net inflow in December was the highest on record, driven by a substantial increase in merchandise trade surplus [17][31] Summary by Sections Section 1: December Cross-Border Net Inflow and Settlement - The bank's foreign-related payment surplus in December was 801.1 billion CNY, with a year-on-year increase of 400.2 billion CNY, primarily due to a significant expansion in merchandise trade surplus [17] - The net settlement in December reached a historical high of 705.5 billion CNY, with a month-on-month increase of 589.1 billion CNY and a year-on-year increase of 780.6 billion CNY [31] Section 2: Arbitrage Trading Returns - The arbitrage trading return rate for 10Y US Treasury bonds in RMB terms fell by 1.43 percentage points to -1.77% due to the marginal appreciation of the RMB [14][17] - The 10Y China-US interest rate spread widened by 15 basis points, with the 10Y US Treasury yield rising by 16 basis points [14] Section 3: Cross-Border Funds and M2 Liquidity - Cross-border funds contributed significantly to M2 liquidity, with a total of 774.4 billion CNY added, reflecting an increase of 863.2 billion CNY month-on-month [55] - The cross-border funds' inflow had a pull rate of 0.10% on M2, indicating a continued upward trend [55]