Core Insights - The People's Bank of China reported a significant drop in RMB deposits in July 2023, with a total decrease of 1.12 trillion yuan, marking a rare monthly decline compared to previous years [2] - The decline in deposits is attributed to various factors, including seasonal influences, reduced loan demand, and a shift in residents' financial behavior towards early mortgage repayments [4][6] - The overall deposit growth for the first seven months of 2023 was 18.98 trillion yuan, but the sharp drop in July affected the growth rate [2][6] Group 1: Deposit Trends - In July, household deposits decreased by 809.3 billion yuan, while corporate deposits fell by 1.53 trillion yuan, with fiscal deposits increasing by 907.8 billion yuan [2] - The decline in deposits is linked to a cooling demand for loans, as evidenced by a 200.7 billion yuan drop in household loans [2][4] - Seasonal factors, such as banks' assessment pressures at the end of the quarter, contributed to the short-term movement of funds [2][6] Group 2: Early Mortgage Repayment - Early mortgage repayments have become a significant driver of fund outflow, with residents opting to pay off loans to save on interest costs [4] - The average interest saved by paying off a 1 million yuan loan early can reach up to 73 million yuan [4] - The trend of early repayments is expected to moderate in the second half of 2023 as mortgage rates decrease [6] Group 3: Investment Behavior - The low interest rates have led to a shift in funds from deposits to wealth management products and the stock market, with non-bank deposits increasing by 2.14 trillion yuan [6] - The wealth management market is projected to grow from 25.34 trillion yuan in June 2023 to 30.67 trillion yuan by mid-2025, with an average annualized return of 3.39% [8] - Despite the growth in wealth management, there are concerns about risks associated with these products, prompting residents to be cautious in their investments [8] Group 4: Consumer Spending and Economic Impact - Consumer spending remains weak, with retail sales in July increasing by only 2.5%, below expectations [4] - The savings rate has climbed to 35%, indicating a preference for saving over spending, which could have a dampening effect on economic growth [4][10] - The overall economic outlook suggests a need for policies to stimulate consumption and investment, as the GDP growth rate is projected to be around 5% [12][14]

Core Views - The article emphasizes the importance of building a strong financial nation and the new historical mission for the wealth management industry, as outlined in the "14th Five-Year Plan" [1] Group 1: Wealth Management Industry Dynamics - Wealth management serves as a crucial link between the funding and asset sides, playing a vital role in providing financial services to the real economy and achieving inclusive finance [2] - The rapid growth of household wealth in China is accompanied by a significant internal structural adjustment, notably the trend of "deposit migration" from traditional bank savings to wealth management products, funds, and capital markets [4] - The current phase of deposit migration is seen as a necessary outcome of optimizing asset allocation in a low-interest-rate environment, with the trend expected to continue as market activity increases [5] Group 2: Factors Driving Deposit Migration - The fundamental change in the interest rate environment is identified as the core driver of the deposit migration trend, with current bank deposit rates significantly lower than those from 2019 to 2021 [6] - The total amount of deposits in China is approximately 1.5 times the total market capitalization of A-shares, indicating substantial potential for capital market inflows [6] Group 3: Balancing Client Expectations - Clients often express a desire for both high returns and low volatility, creating a mismatch with financial realities, which poses challenges for asset management institutions [7] - Solutions to this challenge include setting reasonable expectations and optimizing strategies, such as designing appropriate product structures to smooth short-term volatility [7] Group 4: Investor Education and Engagement - The concept of "investor companionship" is gaining traction, focusing on helping clients understand products and manage risks effectively, especially during market fluctuations [9] - Continuous and detailed investor engagement is crucial for smoothing client emotions and achieving long-term value [9] Group 5: Future Competitiveness in Wealth Management - The competition in the wealth management industry is shifting from scale expansion to a deep competition in core capabilities, including global asset allocation, digital operations, and professional talent [10] - Asset management institutions are encouraged to enhance their strategies and products to meet the growing demand for cross-border investments [10] Group 6: Long-term Value Creation - Key directions for the future include establishing a client-centered investment management system, improving service quality, and leveraging technology for business development [11] - The industry is entering a new growth era, where focusing on service, professional capabilities, and genuine client engagement will be essential for navigating challenges and creating long-term value [11]

Group 1 - The long-term large-denomination certificates of deposit (CDs) are disappearing from the shelves of banks, with major state-owned and joint-stock banks no longer offering 5-year CDs and facing tight supply for 3-year CDs [1] - The average net interest margin for commercial banks in China was reported at 1.42% as of the end of Q3 2025, indicating a historical low, prompting banks to reduce high-cost long-term deposits to stabilize profitability [1] - The remaining 3-year CDs are offering interest rates between 1.5% and 1.8%, which, despite being in the "1.x" range, are still in high demand, leading to tight supply or sold-out statuses at several banks [1] Group 2 - The trend of reducing deposit rates has spread from large banks to local small and medium-sized banks, with some village and town banks in regions like Inner Mongolia and Zhejiang canceling 5-year fixed deposit products [3] - A shift in savings behavior is evident, with a decrease in the proportion of residents inclined to save more and a 5.6 percentage point increase in those preferring to invest more, particularly in non-principal guaranteed bank wealth management products [3] - The scale of the banking wealth management market reached 32.13 trillion yuan by the end of Q3 2025, reflecting a year-on-year growth of 9.42%, with predictions suggesting it could reach 38 trillion yuan by 2026, driven by the ongoing shift in deposits [3]

Core Viewpoint - The long-term large-denomination certificates of deposit (CDs), once seen as a tool for attracting deposits, are gradually disappearing from the market, indicating a shift in banks' strategies to optimize their liability structures and stabilize net interest margins [1][2][3]. Summary by Sections Disappearance of Long-term Large-denomination CDs - Major banks have removed 5-year large-denomination CDs from their offerings, with some still having 3-year CDs available, but these are often marked as "sold out" or "in short supply" [2][3]. - The interest rates for the remaining 3-year large-denomination CDs are concentrated between 1.5% and 1.8%, despite the general trend of rates being in the 1% range [2]. Impact on Banks' Liability Management - The reduction of high-cost long-term large-denomination CDs is a direct method for banks to optimize their liability structures and stabilize net interest margins, which are currently at historical lows [1][3]. - Data shows that most banks in the A-share market have experienced a decline in net interest margins, with state-owned banks seeing a decrease of around 15 basis points [3]. Adjustments in Deposit Structures - Some banks are also eliminating 3-year large-denomination CDs, leaving only shorter-term products available [3]. - A specific bank has announced the cancellation of its 5-year fixed deposit products and has lowered interest rates for other term deposits, indicating a broader trend among regional banks to adjust their deposit offerings [3][4]. Shift in Investment Preferences - Since the establishment of a market-oriented deposit rate adjustment mechanism in April 2022, major banks have reduced deposit rates multiple times, prompting depositors to consider diversifying their investments into lower-risk assets such as government bonds and wealth management products [5]. - A recent survey indicates a shift in consumer behavior, with a decrease in the percentage of residents preferring to save more and an increase in those looking to invest more [5]. Growth in Wealth Management Products - The scale of the banking wealth management market has seen significant growth, with a reported increase of 9.42% year-on-year, reaching a total of 32.13 trillion yuan by the end of the third quarter of 2025 [5]. - Projections for 2026 suggest that the wealth management scale could grow by at least 10%, potentially reaching around 38 trillion yuan [6].

Core Viewpoint - The major state-owned banks in China have collectively removed five-year large-denomination time deposits, indicating a trend of declining long-term deposit products in the banking industry [1][2][4] Group 1: Changes in Deposit Products - The six major state-owned banks have eliminated five-year large-denomination time deposits, with only three-year products remaining, which have seen interest rates drop to between 1.5% and 1.75% [1] - The first bank to announce the cancellation of five-year time deposits was Tongyu County Mengyin Village Bank, which will stop offering this product starting November 5, 2025 [1] - Other banks, including at least seven private banks, have also begun to remove five-year time deposits, reflecting a broader trend in the industry [3][4] Group 2: Interest Rate Adjustments - The interest rates for various deposit products have been adjusted downwards, with one-year and two-year rates reduced by 5 basis points to 1.45% and 1.55%, respectively, and the three-year rate decreased by 10 basis points to 1.85% [3] - The adjustments are a response to the pressure on net interest margins faced by banks, as the yield on assets (like loan rates) is declining while the cost of liabilities (like deposit rates) remains rigid [2][4] Group 3: Industry Context and Implications - The banking industry is experiencing a "two-sided squeeze" where declining loan rates and high competition for deposits are pressuring net interest margins, leading to the reduction of long-term high-interest deposit products [4] - A survey indicated that 62.3% of urban depositors prefer to save more, a slight decrease from the previous quarter, suggesting a shift in savings behavior due to lower interest rates [4] - Analysts predict that while long-term deposits will not completely disappear, they will exhibit differentiated supply characteristics, with state-owned banks likely retaining five-year deposits as service tools but at potentially lower rates [5]

Core Viewpoint - The article discusses the current state of the A-share market, highlighting the mixed performance of various sectors and the impact of external factors such as Nvidia's earnings report. It emphasizes the ongoing volatility and the potential for investment opportunities, particularly in bank stocks and storage leaders, while also noting the challenges faced by the broader market. Market Performance - A-shares experienced a collective decline, with the Shanghai Composite Index down 0.40%, Shenzhen Component down 0.76%, and ChiNext down 1.12% on November 20. The total trading volume was 17,227.98 billion yuan, a decrease of 200.48 billion yuan from the previous day, with over 3,800 stocks declining [12]. - The banking sector showed resilience, with major banks like China Bank and Industrial and Commercial Bank of China reaching historical highs, each exceeding a market capitalization of 20 billion yuan [12]. Sector Analysis - The storage sector saw significant gains, with six major storage leaders experiencing a surge in total market capitalization approaching 7 trillion yuan, influenced by Nvidia's Q3 performance exceeding expectations [3]. - The real estate sector is expected to receive a boost from potential new stimulus policies, including mortgage subsidies for first-time homebuyers, which could enhance market sentiment [6]. Investment Trends - The article notes a shift in investment behavior, with high-net-worth individuals driving new A-share account openings, contrasting with lower participation from ordinary residents. The number of new A-share accounts rose from 1.65 million to 2.94 million between June and September, indicating a potential focus on wealthier investors [4]. - The concept of "deposit migration" is gaining traction, as investors move funds from low-yield savings accounts to higher-yield stock investments, which could enhance market liquidity and consumer confidence through the "wealth effect" [4]. Technical Indicators - The market is currently in a tug-of-war around the 4,000-point mark, with concerns about a potential peak in the bull market. Various indicators, including equity risk premium and trading volume, suggest a short-term correction may be imminent, although no definitive signals of a market top have emerged [10][11]. - The article highlights that while some technical indicators show signs of overbought conditions, the overall valuation metrics remain within reasonable ranges, suggesting that the bull market may continue with support from retail deposits and public funds [11].

Market Overview - A-shares experienced fluctuations with the Shanghai Composite Index slightly up by 0.18% to 3946.74 points, while the Shenzhen Component remained flat and the ChiNext Index rose by 0.25%. The STAR Market Index fell by 1.99% [1] - The total trading volume in the Shanghai and Shenzhen markets was 1.73 trillion yuan, a decrease of 200.2 billion yuan compared to the previous trading day [1] - The market showed a weak risk appetite, with over 4100 stocks declining, indicating a bearish sentiment [1] Investment Strategy - The current market pullback does not signify the end of a bull market, as excess liquidity continues to increase and the narrative of deposit migration persists. Long-term optimism remains for sectors like technology, anti-involution, and exports [1] - Two key investment strategies are proposed: balancing between mainline and defensive stocks, and waiting for an uplift in income expectations [1] Sector Focus - The transition from old to new economic drivers remains unchanged, with thriving sectors concentrated in technology (primarily AI), anti-involution (solar energy, lithium batteries), and manufacturing exports. Suggested ETFs include communication ETF (515880), chip ETF (512760), solar 50 ETF (159864), and coal ETF (515220) [2] - Given the significant prior gains in the technology sector, volatility is expected to increase, and investors are advised to consider dividend stocks such as dividend Hong Kong stocks (159331), dividend state-owned enterprises (510720), and cash flow stocks (159399) [2] Bond Market Analysis - The bond market continues to show a consolidation trend, with the ten-year government bond ETF (511260) slightly down by 0.04% and the thirty-year government bond futures down by 0.41% [3] - The central bank's "moderate easing" stance has led to uncertainty in interest rates, with a shift towards more precise and efficient regulation to avoid excessive liquidity [3] - The outlook for the bond market remains one of fluctuation, with the central bank restarting government bond trading to set a yield ceiling. However, external risks have eased, limiting the potential for significant declines in ten-year bond yields [3]

Core Insights - The concept of "deposit migration" has gained significant attention in the financial market this year, with expectations that residents will shift funds from low-yield assets like deposits to higher-yield investments such as stocks as interest rates decline and the stock market recovers [1] - The government is hopeful that the "wealth effect" from financial markets can enhance consumer spending and confidence, as reflected in the recent "14th Five-Year Plan" recommendations emphasizing the construction of a strong financial nation [1] Group 1: Market Trends - Data indicates that "deposit migration into the market" is indeed occurring, with a decline in residents' demand deposits and an increase in non-bank deposits, suggesting liquidity is moving towards capital markets [2] - From July to August, residents' demand deposits decreased by 1.3 trillion yuan, while non-bank deposits increased by 3.3 trillion yuan, indicating a potential flow of deposits into capital markets [2] - The M1 money supply is rising, showing that previously time-bound deposits are being "activated" and could enter the market as a backup force [2] Group 2: Investor Behavior - The new A-share accounts opened from June to September primarily come from high-net-worth individuals, with ordinary residents showing lower participation levels [2] - The number of new A-share accounts on the Shanghai Stock Exchange rose from 1.65 million to 2.94 million between June and September, but remains significantly lower than the peak of 6.85 million in October 2024 and 7.2 million in April 2015, indicating that the current market drive is more from high-net-worth individuals rather than retail investors [2] Group 3: Financial Inclusion - To truly harness the "wealth effect" for high-quality development, it is essential to enhance the inclusiveness of the financial system, allowing more ordinary residents to participate and benefit from capital market growth [4] - Financial markets need to focus on "breadth" and "inclusivity," encouraging financial institutions to develop investment tools aimed at the general public, such as low-fee, low-threshold mutual funds, index ETFs, and target-date funds [4] - Promoting automated investment options and simplifying investment education can help lower barriers for ordinary investors, thereby enhancing their confidence in consumption and investment [4]

Core Insights - The traditional five-year fixed deposit, once a reliable investment for conservative investors, is gradually being phased out by banks due to declining interest rates and increased early withdrawals [2][4][8] Group 1: Changes in Deposit Products - Over 30% of fixed deposit customers are withdrawing early, resulting in an average interest loss of over 70% [4] - The interest rate for five-year fixed deposits has been reduced, with some banks even removing these products from their offerings [10][12] - The phenomenon of "interest rate inversion" is becoming common, where shorter-term deposits yield higher returns than longer-term ones, indicating banks' concerns over long-term funding costs [6][8] Group 2: Impact on Banking Profitability - The net interest margin, a key indicator of bank profitability, is under pressure, leading banks to adjust their deposit strategies [8][10] - Major banks have seen a decline in net interest margins, with state-owned banks experiencing an 11 basis point drop compared to the previous year [8] Group 3: Shift in Investment Strategies - Investors are increasingly moving their funds towards the real economy and capital markets due to shrinking deposit yields and inflation pressures [12] - A new investment strategy termed "New Three Golds," which includes money market funds, bond funds, and gold funds, is gaining popularity among younger investors [12][14] - The importance of diversified asset allocation is emphasized, moving away from reliance on long-term fixed deposits [16][20] Group 4: Financial Literacy and Caution - Investors are advised to assess their financial needs and avoid blindly choosing long-term deposits, as early withdrawals can lead to significant interest losses [18][20] - The necessity for financial education is highlighted, as investors should be cautious of high-yield products and scams [20][22] - The adage of not putting all eggs in one basket remains relevant, as the space for high-yield long-term deposits continues to shrink [22]

Core Insights - The recent data from the People's Bank of China indicates a significant decrease in both household and corporate deposits, while non-bank deposits have increased, suggesting a shift in asset allocation rather than a true "migration" of deposits [1][3][8] Group 1: Deposit Trends - In October, household deposits decreased by 1.34 trillion yuan, and corporate deposits fell by 1.09 trillion yuan, while non-bank deposits rose by 1.85 trillion yuan [1] - The term "deposit migration" is deemed inaccurate as it reflects a reallocation of deposits among different entities rather than a net outflow [1][3] - The increase in non-bank deposits is attributed to the expansion of wealth management products and sustained trading activity in the stock market [3][8] Group 2: Wealth Management Products - "Fixed income plus" (固收+) products have gained popularity, with some achieving annualized returns of up to 7% [2][6] - The total market size for "fixed income plus" wealth management products is expected to grow by over 1.4 trillion yuan this year, contributing to an overall market size of 33.5 trillion yuan by 2025 [6] - The shift towards "fixed income plus" reflects a broader trend of investors seeking higher yields as traditional deposit rates decline [6][9] Group 3: Investor Behavior - There is a notable increase in the number of individual and institutional investors in wealth management products, with personal investors rising by 10.29 million in the first half of the year [4] - The risk appetite among investors has shown signs of recovery, reversing a four-year trend of declining risk tolerance [4][10] - Wealth management firms are adapting by diversifying their product offerings and enhancing risk management strategies to meet changing investor expectations [9][10] Group 4: Market Dynamics - The overall market for wealth management products reached 32.13 trillion yuan by the end of Q3, marking a year-on-year increase of 9.42% [8] - The transition towards "fixed income plus" is seen as a critical strategy for wealth management firms, although progress has been slow due to investor hesitance towards net asset value fluctuations [8][9] - Firms are increasingly incorporating equity assets into their "fixed income plus" products to enhance returns and attract a broader investor base [7][9]