Market Overview and Analysis - The primary market saw the issuance of government bonds, local government bonds, and policy financial bonds amounting to 0 billion, 270.7 billion, and 142 billion respectively, with net financing of 0 billion, 178 billion, and 142 billion [1] - Financial bonds (excluding policy financial bonds) totaled an issuance of 92.1 billion with a net financing of 24.7 billion, while non-financial credit bonds had an issuance of 218.7 billion and a net financing of 3.6 billion [1] Secondary Market Review - The central bank announced the resumption of government bond trading operations, leading to a decline in bond market yields, influenced by signals of monetary easing and weak economic data [2] Liquidity Tracking - As the month-end approaches, the funding environment remains stable, with R001 and R007 rates rising by 2.7 basis points each compared to the previous week [3] Policy and Fundamentals - The October manufacturing PMI indicates significant downward pressure on traditional industries, with high-frequency data showing stable production at month-end, continued weakness in real estate consumption, and a mixed price performance [4] Overseas Market - The trade sentiment between China and the U.S. has improved, while Federal Reserve Chairman Powell has adopted a hawkish stance. The 10-year U.S. Treasury yield closed at 4.11%, up 9 basis points from the previous week [5] Equity Market - A-shares experienced a pullback after initially rising due to positive developments in U.S.-China negotiations and overcrowding in the tech sector. The Wind All A index fell by 0.52%, with power equipment and non-ferrous metals leading gains, while communications lagged [6] - The average daily trading volume increased significantly to 2.33 trillion, with a weekly average decrease of 528.02 billion. As of October 30, 2025, the total financing balance for all A-shares was 24,811.49 billion, an increase of 47.25 billion from October 23 [6] Bond Market Strategy Outlook - The resumption of government bond trading is expected to lead to a recovery period in the bond market, but caution is advised against chasing high prices. The central bank's focus on medium to short-term bonds is more certain, while long-term bonds may not perform as strongly in the short term [7] - In the credit bond sector, increased liquidity suggests a potential for higher allocation in flexible medium-duration investment-grade bonds and secondary capital bonds to capture capital gain opportunities [7] - For convertible bonds, the market has shown volatility influenced by U.S.-China tensions and domestic policy expectations, making it challenging to navigate. A risk-reward framework is recommended, focusing on dividend and value convertible bonds when the index approaches the upper range and on high-growth technology and export sectors when nearing the lower range [7]

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Report Summary 1. Investment Rating - No investment rating for the industry is provided in the report. 2. Core View - This week, overseas ETF funds showed an overall outflow trend, with significant net outflows after large - scale positive inflows in September. External investors are cautious, possibly due to renewed Sino - US frictions. Short - term attention should be paid to Sino - US negotiation progress and domestic policy support [12]. 3. Summary by Directory 3.1 Wide - based ETFs - **Average Weekly Returns**: The data shows various average weekly returns for different wide - based ETFs, such as some with positive returns like 6.43% and 1.09%, and others with negative returns like - 0.52% and - 2.84% [4]. - **Fund Inflows/Outflows**: There are detailed records of fund inflows and outflows for the top ten wide - based ETFs. For example, the Huatai - PineBridge CSI 300 ETF had an inflow of 27.54 billion yuan in one record and an outflow of 22.41 billion yuan in another, while the ChinaAMC SSE STAR Market 50 ETF had an inflow of 27.23 billion yuan and an outflow of 26.82 billion yuan [4]. 3.2 Industry - themed, Smart Beta, and Hong Kong Stock Connect ETFs - **Industry - themed ETFs**: The average weekly return was 3.52%, and there were corresponding fund inflows/outflows, with the largest inflow reaching 109.18 billion yuan [6][8]. - **Smart Beta ETFs**: The average weekly returns ranged from - 2.30% to 2.23%, and the fund inflows/outflows varied from - 1.64 billion yuan to 0.00 billion yuan [9]. - **Hong Kong Stock Connect ETFs**: The average weekly returns were between - 3.56% and 2.0%, and the fund inflows/outflows were from - 5.0 billion yuan to 25 billion yuan [9]. 3.3 Overseas ETFs - **Overall Fund Flow**: This week, overseas ETFs had a net outflow of 10.85 billion yuan. In terms of style indices, the CSI 300 and CSI A500 experienced significant outflows, while only the CSI 1000 and CSI 500 had slight inflows. At the industry level, the banking sector had concentrated outflows, and sectors like non - bank finance and food and beverage also had net outflows. Among individual stocks, Kweichow Moutai was the most heavily sold, followed by Contemporary Amperex Technology and Ping An Insurance [12]. - **Top 10 Industry Index Outflows**: The top 10 industry index outflows included sectors such as banking, non - bank finance, and food and beverage, with the banking sector having the largest outflow of 1.82 billion yuan [15]. - **Top 10 Individual Stock Outflows**: The top 10 individual stock outflows included Kweichow Moutai, Contemporary Amperex Technology, and Ping An Insurance, with Kweichow Moutai having a relatively large outflow [19].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In the short term, Sino-US frictions have deepened, which will affect the stock index trend, especially high - valuation technology stocks. The stock index is expected to undergo an adjustment, but the decline may be weaker than that in April, so there is no need to be overly pessimistic. In the long - term, the domestic market is driven by liquidity, with a continuous influx of incremental funds, so there is still upward momentum [3]. - The US is entering a new interest - rate cut cycle, which is beneficial for RMB appreciation and the return of foreign capital, bringing new incremental funds [9]. - Current policies to stabilize the capital market are positive, and the bottom line of the stock index is clear. New technologies and new consumption are promoting the stabilization and recovery of economic expectations [9]. - After the risk - free interest rate drops to a low level, the entry of medium - and long - term funds and residents into the market will enter a new cycle [9]. - In the future, attention should be paid to trading volume. If the trading volume of the two markets can remain above 2 trillion yuan, the market can still maintain relative strength. It is recommended to focus on semiconductor, AI computing power and other technology growth tracks with profit certainty, and also pay attention to the rotation allocation value of low - valuation defensive sectors such as finance, securities, and consumption [9]. Summary by Relevant Catalogs Market Performance - This week, domestic stock indices declined, with the ChiNext and STAR Market experiencing significant drops. For example, the STAR 50 index fell by 6.16%, and the ChiNext index fell by 5.71%. Among global indices, the NASDAQ index rose by 2.14%, and the Hang Seng Tech index fell by 7.98% [12][17]. - By industry, the trends of the 31 Shenwan primary industry indices were divergent this week. A few sectors such as coal, banking, and food and beverage rose, while sectors such as media, electronics, and telecommunications led the decline [17]. Liquidity - In September, government bonds supported social financing, the return of wealth management products promoted the recovery of M2, while M1 remained sluggish. The M1 balance decreased by 7.4% year - on - year, with the decline rate widening by 0.1 percentage points compared with the previous month, and it has been in negative growth for 7 consecutive months. The "gap" between M1 and M2 continued to narrow [15][16][18]. - The core support for the increase in social financing in September came from government bond issuance, while the weakness of RMB loans was the main drag, indicating that the recovery of real - economy financing demand still takes time. In September, the new social financing increment was 3.76 trillion yuan, a year - on - year decrease of 372.2 billion yuan. The balance of outstanding social financing was 402.19 trillion yuan, a year - on - year increase of 8.0%, with the growth rate slightly declining by 0.1 percentage points compared with the previous month [18]. - The funds rate (DR007) remained low, and 300 billion yuan of MLF was injected in September. The yield of 10 - year government bonds was around 1.7% [18]. Trading Data and Sentiment - This week, the trading volume of the two markets decreased, and high - priced stocks adjusted. The average daily trading volume (MA5) decreased to around 2 trillion yuan. Liquidity is an important factor supporting the current index and needs continuous monitoring [28]. - From January to August 2025, the number of new accounts opened showed fluctuations. For example, 1.57 million new accounts were opened in January, and 2.86 million in February [28]. Index Valuation - As of October 17, 2025, the absolute valuation of the index was at a low level. For major stock indices, the valuation quantiles were in the order of CSI 1000 > CSI 500 > SSE 300 > SSE 50 [36]. - The stock - bond cost - performance ratios and their quantiles of major stock indices such as SSE 50, CSI 500, CSI 1000, and SSE 300 were also presented, providing a reference for investment decisions [42]. Index Industry Weights - As of June 30, 2025, in the SSE 50 index, the weights of banking, non - banking finance, and food and beverage were relatively high, at 21.34%, 15.48%, and 13.88% respectively. The electronics industry became the fourth - largest weighted industry [45][46]. - In the SSE 300 index, the weights were more dispersed, and the top three weighted industries were banking, non - banking finance, and electronics [46]. - In the CSI 500 index, the top three weighted industries were electronics, pharmaceutical biology, and non - banking finance [46]. - In the CSI 1000 index, the top three weighted industries were electronics, pharmaceutical biology, and computer [46]. Other Overseas and Domestic Policy Tracking - Domestic policies: In 2025, the government work report and the Two Sessions in March set an economic growth target of 3% and a CPI increase target of around 2%. A moderately loose monetary policy and a more proactive fiscal policy were implemented, with a planned deficit rate of around 4% and the issuance of 1.8 trillion yuan of ultra - long - term special treasury bonds. In May, the deposit reserve ratio was reduced by 0.5 percentage points, the policy interest rate was lowered by 0.1 percentage points, and the provident fund interest rate was lowered by 0.35 percentage points. A 500 - billion - yuan loan for service consumption and elderly care was established. In September, the achievements of the financial industry during the 14th Five - Year Plan were summarized, and further reforms in the capital market were promoted [51][52]. - US Federal Reserve policy: The US is about to enter a new interest - rate cut cycle, with a 25 - basis - point cut in September. As of October 19, the probability of another rate cut in October exceeded 30%, and there are still two expected rate cuts within the year [53]. - Sino - US relations: China's implementation of "long - arm jurisdiction" and strengthened rare - earth control exceeded US expectations, and Trump countered by imposing additional tariffs. A video call was held between China and the US on October 18, which may affect market risk appetite in the short term [54].

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - In the short term, Sino-US frictions deepen, affecting the stock index trend, especially high - valuation technology stocks. The stock index is expected to adjust, but the decline may be weaker than that in April, and there is no need to be overly pessimistic. In the long - term, the domestic market is driven by liquidity, with continuous inflow of incremental funds, and still has upward momentum [3]. - The US is entering a new interest - rate cut cycle, which is beneficial for RMB appreciation, foreign capital inflow, and bringing new incremental funds [9]. - Current policies to stabilize the capital market are positive, with a clear bottom line for the stock index. New technologies and new consumption are promoting the stabilization and recovery of economic expectations [9]. - After the risk - free interest rate drops to a low level, the entry of medium - and long - term funds and residents into the market will enter a new cycle [9]. - Future index performance depends on trading volume. If the trading volume of the two markets can remain above 2 trillion yuan, the index can maintain relative strength [9]. - It is recommended to focus on semiconductor, AI computing power and other technology - growth sectors with certain profitability, and also pay attention to the rotation allocation value of low - valuation defensive sectors such as finance, securities, and consumption [9]. Summary by Directory Market Performance - This week, domestic stock indices declined, with the ChiNext and STAR Market falling significantly. For example, the ChiNext Index dropped 5.71% and the STAR 50 Index dropped 6.16%. The performance of global indices also varied, with the Nasdaq rising 2.14% and the Hang Seng Technology Index falling 7.98% [12][17]. - Among the Shenwan primary industries, the trends were differentiated. A few sectors such as coal, banks, and food and beverages rose, while sectors such as media, electronics, and telecommunications fell significantly [17]. Liquidity - In September, government bonds supported social financing, the return of wealth management funds pushed up M2, while M1 remained sluggish. The "gap" between M1 and M2 continued to narrow. By the end of September, the M2 balance was 209.48 trillion yuan, with a year - on - year increase of 6.8%, and the M1 balance was 82.82 trillion yuan, with a year - on - year decrease of 7.4% [15][18]. - The core support for the increase in social financing in September came from government bond issuance, while weak RMB loans were the main drag. In September, the new social financing increment was 3.76 trillion yuan, with a year - on - year decrease of 372.2 billion yuan. The balance of outstanding social financing was 402.19 trillion yuan, with a year - on - year growth of 8.0% [18]. Trading Data and Sentiment - This week, the trading volume of the two markets decreased, and high - priced stocks adjusted. The trading volume (MA5) of the two markets decreased to around 2 trillion yuan, and liquidity is an important factor supporting the current index and needs continuous monitoring [28]. - The number of new accounts opened showed fluctuations. From January to August 2025, the number of new accounts opened was 1.57 million, 2.86 million, 3.06 million, 1.02 million, 1.555 million, 1.6464 million, 1.9636 million, and 2.6503 million respectively [28]. Index Valuation - As of October 17, 2025, the absolute valuation of the index was at a low level. For example, the latest PB of the Shanghai Composite Index was 16.51, with a percentile of 82.67, and the latest PB of the entire A - share market was 21.95, with a percentile of 83.75 [36]. - The stock - bond ratio and its percentile of major stock indices were also presented, which can be used to evaluate the investment value of stocks relative to bonds [42]. Index Industry Weights - As of June 30, 2025, in the SSE 50 Index, the weights of banks, non - bank finance, and food and beverages were relatively high, at 21.34%, 15.48%, and 13.88% respectively. The electronics industry became the fourth - largest weighted industry [45][46]. - In the CSI 300 Index, the weights were more dispersed, with the top three weighted industries being banks, non - bank finance, and electronics [46]. - In the CSI 500 Index, the top three weighted industries were electronics, pharmaceutical biology, and non - bank finance [46]. - In the CSI 1000 Index, the top three weighted industries were electronics, pharmaceutical biology, and computers [46]. Other Overseas and Domestic Policy Tracking - Domestic policies: In 2025, the government work report and the Two Sessions in March set an economic growth target of 3%, a CPI increase of about 2%, and proposed a moderately loose monetary policy and a more proactive fiscal policy. In May, the reserve requirement ratio was cut by 0.5 percentage points, the policy interest rate was lowered by 0.1 percentage points, and a 500 - billion - yuan loan for service consumption and elderly care was established. In September, the "14th Five - Year Plan" achievements in the financial industry were summarized, and further reforms in the capital market were proposed [51][52]. - US Fed policy: The US is about to enter a new interest - rate cut cycle, with a 25 - BP cut in September. As of October 19, the probability of another rate cut in October exceeded 30%, and there are still two expected rate cuts within the year [53]. - Sino - US relations: China's "long - arm jurisdiction" and strengthened rare - earth control exceeded US expectations, and Trump countered with additional tariffs. A video call was held between China and the US on October 18, which may affect market risk appetite in the short term [54].

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - The downward trend in the energy and chemical sector remains clear, and short positions entered before August/September should be held [1] - The short - term decline in the crude oil market is mainly driven by macro factors, while the long - term decline is due to the supply - increase and demand - decrease pressure from the OPEC+ production increase and the fourth - quarter demand off - season [2] - For most products in the energy and chemical sector, both macro and fundamental factors are driving the prices down, with the exception of some products that may have short - term technical rebounds [1] Summary by Relevant Catalogs Crude Oil - Logic: The sharp drop on Friday night was due to Trump's new tariff threat, with short - term trading driven by macro factors. Fundamentally, there is pressure from increased supply and decreased demand. Technical rebounds, if any, may be limited [2] - Technical Analysis: The daily - level shows a medium - term downward structure, and the hourly - level shows a short - term downward structure. The strategy is to hold short positions [2] Benzene Ethylene (EB) - Logic: Macro factors put pressure on the market, and the fundamental situation is bearish due to high supply, high inventory, and low downstream demand [5] - Technical Analysis: The hourly - level shows a short - term downward structure. The strategy is to hold the remaining short positions and pay attention to contract roll - over [5] Rubber - Logic: Macro factors accelerate the decline, and the fundamental situation is bearish due to the sharp decline in downstream demand and the high probability of increased supply [7] - Technical Analysis: The daily - level shows a medium - term downward structure, and the hourly - level shows a short - term downward structure. The strategy is to hold short positions [7] Synthetic Rubber (BR Rubber) - Logic: The main driver is the downward pressure on the cost side of butadiene. Macro factors also have a short - term bearish impact [9] - Technical Analysis: The daily - level shows a medium - term downward structure, and the hourly - level shows a short - term downward structure. The strategy is to hold short positions [12] PX - Logic: The supply - demand situation is slightly weakening, and the main driver is the cost side of crude oil [14] - Technical Analysis: The hourly - level shows a short - term downward structure. The strategy is to hold newly covered short positions [14] PTA - Logic: The supply - demand situation is slightly weakening, and the main driver is the cost side of crude oil [18] - Technical Analysis: The hourly - level shows a short - term downward structure. The strategy is to hold short positions entered last night [18] PP - Logic: Macro factors bring pressure, and the high - supply pattern remains unchanged. The improvement in supply - demand is not realized. Attention should be paid to the cost - collapse logic [20] - Technical Analysis: The hourly - level shows a short - term downward structure. After taking profit before the holiday, there is no good entry point, so it is recommended to wait and see [20] Methanol - Logic: Macro factors have some pressure, and there is high inventory pressure at ports. Attention should be paid to the seasonal decline in Iranian methanol plant operation. It can be used as a long - position hedge [24] - Technical Analysis: The daily - level shows a medium - term and short - term downward structure. The strategy is to hold the remaining short positions cautiously and use 2350 as the final stop - profit point. It can be used as a long - position after breaking through the pressure [24] PVC - Logic: Macro factors have a bearish impact, and the supply - demand situation is weak due to high supply, high inventory, and low demand [27] - Technical Analysis: The daily - level shows a medium - term downward structure, and the hourly - level shows a short - term downward structure. The strategy is to hold short positions [28] Ethylene Glycol (EG) - Logic: Macro factors are bearish, and the supply - demand situation is weak due to increased supply and low demand [29] - Technical Analysis: The daily - level shows a medium - term downward structure, and the hourly - level shows a short - term downward structure. The strategy is to hold short positions [31] Plastic - Logic: The supply - demand situation changes little, and attention should be paid to the cost - collapse logic [33] - Technical Analysis: The daily - level shows a medium - term downward structure, and the hourly - level shows a short - term downward structure. The strategy is to hold the remaining short positions [33] Soda Ash - Logic: The high - supply and high - inventory pattern is intensifying, and the demand is not expected to improve. The downward pressure on the market remains [37] - Technical Analysis: The hourly - level shows a short - term downward structure. The strategy is to hold the remaining short positions [37] Caustic Soda - Logic: There is an expectation of supply reduction due to plant maintenance, and the downstream demand is recovering. The current valuation is low, so it is not advisable to short [39] - Technical Analysis: The hourly - level shows a short - term downward structure. After taking profit before the holiday, there is no good entry point, so it is recommended to wait and see [39]

Market Overview - The Nikkei average index closed at 46,847 points on October 14, down 1,241 points (2.58%) from the previous weekend, primarily due to political uncertainty following the Komeito party's exit from the ruling coalition with the Liberal Democratic Party (LDP) and concerns over US-China tensions [2][4]. Political Impact - The exit of the Komeito party has led to increased political uncertainty, causing investors to withdraw from the market. The volatility index (Nikkei Volatility Index, VI) reached around 34, the highest level since April 22, indicating heightened market anxiety [4]. - Analysts express concerns about the potential for a change in government if opposition parties unite, which could lead to a lack of clarity in policy execution and delays in investments in growth sectors, further impacting the Japanese stock market [4]. Stock Performance - Stocks that were previously bought during the "Takaichi trade" following the appointment of LDP President Sanae Takaichi saw significant declines, with defense-related IHI shares dropping over 3% and cybersecurity stocks like NEC falling more than 4% [4]. - Despite the overall market decline, some stocks showed resilience, with Yaskawa Electric rising by 7% amid speculation that the exit of the Komeito party would not significantly impact corporate performance [5]. Market Sentiment - There is a prevailing market assumption that the LDP will continue to govern as a minority party, leading to expectations of limited market declines despite potential operational gridlock [5]. - Some analysts noted stronger-than-expected buying demand, suggesting that the broader fiscal expansion framework would remain unchanged even after the Komeito's exit from the coalition [5].

Group 1 - The article discusses whether the U.S. tariff storm is completely over, indicating that recent tensions between the U.S. and China may not escalate further, as both sides seem to prefer a resolution [3] - The market's response to the easing tensions is noted, with the Shanghai Composite Index only slightly down by 0.19% and the ChiNext Index down by 1.1%, suggesting a limited impact on A-shares [3] - The article suggests a potential shift in investor sentiment towards a more desensitized view of tariff threats, which could lead to reduced market volatility in the coming weeks [3] Group 2 - The article highlights that October's market focus may shift towards core and long-term factors, as external disturbances weaken and the resilience of A-shares strengthens [3]

Core Viewpoint - Nasdaq is implementing new listing rules that will make it more difficult for Chinese companies to go public in the U.S., requiring a minimum fundraising of $25 million and stricter total market capitalization standards [2][5]. Group 1: New Listing Rules - New regulations will require new stocks to raise at least $25 million at the time of listing, with stricter total market capitalization standards [2]. - For companies aiming to list in markets targeting small businesses, the minimum total market capitalization must reach $15 million [4]. - Stocks with a total market capitalization below $5 million will face expedited delisting procedures [4]. Group 2: Market Context and Implications - The changes are part of a broader effort to protect market health and strengthen investor protection amid concerns over stock price manipulation in foreign stocks [4][5]. - There are over 100 Chinese companies listed in the U.S., including major firms like Alibaba and smaller companies [5]. - The tightening of listing rules is seen as a reflection of the ongoing U.S.-China tensions in the capital markets [5].

Overall Performance - Semiconductor Manufacturing International (SMIC) reported a revenue of $2.2 billion for Q2 2025, slightly above market expectations of $2.16 billion, but down 1.7% quarter-over-quarter, with guidance indicating a further decline of 4-6% [1][14] - The gross margin for Q2 2025 was 20.4%, reaching the upper limit of the guidance range (18-20%) and exceeding market expectations of 19.7% [1][4] Revenue and Pricing Dynamics - The decline in revenue was primarily attributed to a decrease in average selling prices, influenced by an increase in the shipment of 8-inch wafers, which lowered the overall product price [2][16] - The shipment volume for 8-inch wafers increased by 4.3% quarter-over-quarter, while the average price per wafer decreased by 5.7% [3][16] Business Segment Performance - The revenue from the Chinese market remains stable at over 80%, with only the mobile and industrial sectors showing growth, while other segments like PC and consumer electronics experienced declines [2][24] - The mobile business saw a minimal quarter-over-quarter growth of 1.7%, significantly lower than the double-digit growth seen in the past two years [2][24] Expenditure and Capital Investment - Operating expenses were primarily driven by R&D and administrative costs, with R&D expenses remaining flat year-over-year, while administrative expenses rose by 17.6% due to increased factory setup costs [2][30] - Capital expenditures for the quarter were $1.885 billion, indicating a commitment to maintaining high capital investment despite weak downstream demand [2][30] Future Guidance - For Q3 2025, SMIC expects revenue to increase by 5-7%, translating to $2.32-$2.36 billion, slightly below market expectations of $2.37 billion [4][18] - The company anticipates a gross margin of 18-20% for the next quarter, which is also below market expectations of 21.1% [4][22] Capacity Utilization and Market Conditions - The capacity utilization rate for Q2 2025 was 92.5%, reflecting a recovery driven by early inventory buildup for 8-inch wafers, despite overall weak demand in key markets [2][22] - The total capacity reached 2.584 million wafers, with a 1% increase quarter-over-quarter, supported by sustained high capital expenditures [2][22] Geographic Revenue Distribution - In Q2 2025, revenue from the Chinese market accounted for 84.1%, with the U.S. and Eurasia contributing 12.9% and 3%, respectively [28] - Despite government subsidies, the domestic market remains sluggish, leading to a 1.9% quarter-over-quarter decline in revenue from the Chinese region [28][32]