Group 1 - The report highlights the ongoing restructuring of global trade dynamics, with China's economic ties to emerging markets strengthening while its direct trade with the US is diminishing. This shift is seen as a potential opportunity for China amidst a "strategic stalemate" with the US [4][5][6] - The A-share market is positioned to potentially enter a bull market phase, driven by increasing household asset allocation towards equities, particularly as 2025 marks a peak for deposit reallocations. The report anticipates a gradual shift in asset allocation as residents seek diversified investment options [7][8] - The report suggests that the current market has not yet signaled the start of a bull run, with supply-side improvements clear but demand-side factors remaining complex. The timing for a market rally is still uncertain, with expectations for a clearer picture emerging in 2026 [9][10] Group 2 - A-share earnings forecasts for 2025 indicate a year-on-year growth of 4.6% for non-financial companies, with significant fluctuations expected throughout the year. The second quarter is projected to be a critical window for export recovery, while the latter half of the year may see a decline in demand [12] - The asset management industry is not yet prepared for a bull market, as historical patterns show that a cycle of capital inflow is necessary for a bull market to take hold. The report emphasizes the need for a sustained accumulation of profit effects to trigger a significant shift in public fund dynamics [13] - The report anticipates that the next potential bull market may evolve into a "slow bull" unique to China, characterized by prolonged but gradual improvements in fundamentals and a higher value attribute in the market [18][19]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - Interest rates are expected to reach new lows, with a new downward trend possibly starting from mid - to late June. The report believes that the 10 - year treasury bond could reach 1.4% - 1.5% within the year [5][18]. 3. Summary by Related Content Bond Market Performance This Week - The bond market fluctuated strongly this week, with most interest rates across different tenors declining. At the beginning of the month, funds became looser, with the R001 rate dropping to around 1.45% and the R007 rate to around 1.55%. The 10 - year and 30 - year treasury bond rates decreased by 1.7bps and 2.0bps to 1.65% and 1.88% respectively. The 1 - year AAA certificate of deposit rate fell 2.3bps to 1.68%, and the 3 - year and 5 - year AAA - secondary capital bond rates dropped 3.2bps and 1.9bps [1][8]. Alleviation of Market Concerns - Market concerns about the bond market have eased. Big banks have limited pressure to sell bonds, and there is no obvious need to realize floating profits at the end of the quarter. Although a large number of certificates of deposit will mature in the coming weeks, due to the limited liability pressure of banks, they are still lending a large amount of funds, and the certificate of deposit rates remain low. The central bank's repurchase operation at the beginning of the month also helps stabilize market expectations [1][8]. Factors Driving Interest Rate Decline - The main driver of interest rate decline is the decrease in the real - economy return rate. The weakening trend of prices in the next few months is expected to lead to a reduction in the financing cost that the real economy can accept. Empirical data shows a high correlation between industrial enterprises' EBIT/ total assets and the weighted average loan interest rate. The recent weakening of industrial product prices indicates a possible decline in corporate profitability in the next few months, which means the corporate - acceptable financing cost may continue to fall [2][9]. Manifestation of Interest Rate Decline - The decline in broad - spectrum interest rates is reflected in both the decrease in liability costs and the narrowing of net interest margins. The liability cost decline is evident in various financial institutions, with the yields of deposits, money market funds, wealth management products, and insurance products showing a downward trend. For example, the 1 - year and 5 - year deposit rates of Industrial and Commercial Bank of China have decreased by 50bps and 70bps respectively since the end of 2023, and were further reduced by 15bps and 25bps in May this year. The 7 - day average interest rate of Yu'E Bao has dropped below 1.2%, hitting a record low [3][12][13]. - Financial institutions' earnings are also on a downward trend. The net interest margin of banks has been decreasing over the past few years, dropping from 1.91% at the end of 2022 to 1.43% in the first quarter of this year, a decrease of 9bps compared to the end of last year, and it may continue to decline. Insurance's fee - difference loss may also be shrinking, and the management fees of various fixed - income asset management institutions may be under continuous pressure [4][15]. Short - term Driving Variables - In addition to the fundamental - driven decline in broad - spectrum interest rates, changes in asset supply and demand and the central bank's liquidity support will be the main short - term variables driving interest rates to break previous lows. The supply of government bonds will slow down in the next few months, while the supply of funds will remain abundant. The central bank has increased its support for liquidity, conducting repurchase operations in early June to maintain capital stability. The bond market may once again experience a situation where demand exceeds supply, and the asset shortage may reappear [4][17][18].

Group 1 - The total market value of public REITs has surpassed 200 billion yuan, reaching 202.07 billion yuan as of June 6, with the Shanghai Stock Exchange accounting for 135.14 billion yuan, or 67% of the total [1] - The first public REITs in sectors such as data centers, tourist attractions, elderly care facilities, and ice and snow economy are expected to accelerate in the future [1] - Housing REITs, supported by national policies, have seen a favorable environment for issuance, with local policies also encouraging REITs in technology innovation projects [1] Group 2 - Housing REITs typically have underlying assets with rigid demand, especially in first-tier cities and rapidly growing population areas [1] - The annualized cash distribution rate of housing REITs is generally high, and their valuation levels are relatively low, making them attractive in a market environment characterized by asset scarcity [2] - Housing REITs are favored by long-term funds such as social security and pension funds due to their high dividend yield and moderate risk profile in the context of declining bond market interest rates [2]

Report Industry Investment Ratings - No specific industry investment ratings are provided in the report. Core Views of the Report - The positive signals from the Sino - US economic and trade talks are expected to drive short - term strength in stock indices [1]. - The situation of asset shortage and weak economy is favorable for bond futures, but the central bank's short - term interest rate risk warning suppresses the upward movement [1]. - Different commodities have different trends: some are expected to rise, some to fall, and some to fluctuate, which are affected by factors such as supply - demand relationships, macro - economic conditions, and policy uncertainties [1]. Summary According to Relevant Catalogs Macro - finance - Stock indices are expected to be strong in the short term due to positive signals from Sino - US economic and trade talks [1]. - Bond futures are favored by asset shortage and weak economy, but short - term interest rate risk warnings limit upward movement [1]. Precious Metals - Gold is expected to fluctuate in the short term and has a solid long - term upward logic [1]. - Silver is expected to remain strong but there is a risk of a sharp pullback [1]. Non - ferrous Metals - Copper is expected to remain strong due to the boost of the Sino - US leaders' phone call [1]. - Aluminum may fluctuate weakly due to repeated macro - sentiment and weakening downstream demand despite low inventory support [1]. - Alumina may rebound in the short term due to rising spot prices, significant futures discounts, and mine - end disturbances [1]. - Nickel is expected to fluctuate in the medium - to - long term due to uncertainties in tariff policies and potential oversupply of primary nickel [1]. Black Metals - Iron ore may fluctuate as the iron - making volume is expected to peak and there is an expected increase in supply in June [1]. - Manganese silicon and silicon iron have different supply - demand situations, with manganese silicon having heavy warehouse receipt pressure and silicon iron having a tight supply - demand balance due to production cuts [1]. - Steel products such as hot - rolled coils and stainless steel have different trends based on factors like cost, supply, and demand [1]. Agricultural Products - Corn is expected to be strong in the medium term due to tightening supply - demand, but its upward potential is limited by domestic substitute grain prices [1]. - Soybean meal is expected to face pressure on the spot basis and near - month contracts due to expected inventory accumulation in June [1]. - Sugar production in Brazil is expected to change in the 2025/26 season, and the future production may be affected by the crude oil price [1]. Energy and Chemicals - Crude oil and fuel oil are expected to fluctuate, affected by OPEC+ production decisions, geopolitical situations, and seasonal consumption [1]. - PTA, ethylene glycol, and other chemical products have different trends based on factors such as cost, supply, and demand [1]. - Urea may rebound, while methanol is expected to fluctuate weakly in the short term [1]. Others - Shipping container freight on the European route has a "strong expectation, weak reality" situation, and certain trading strategies are recommended [1]. - LPG is expected to fluctuate weakly in the short term due to weak demand and lack of news guidance [1].

Group 1 - Haitong Fund Management Co., Ltd. announced that its credit bond ETF (511190) will be eligible for pledge-style repurchase transactions starting from June 6, 2025, making it one of the first credit bond ETFs in the market to serve as general collateral for such transactions [1] - The introduction of general pledge-style repurchase business is expected to provide multiple benefits for credit bond ETF products and investors, enhancing liquidity and attractiveness, and facilitating participation from various investors [1][2] - The credit bond ETF (511190) has seen a continuous net inflow of funds for 11 consecutive trading days, with a total net inflow exceeding 3.58 billion yuan, indicating strong market interest [1] Group 2 - The credit bond ETF (511190) closely tracks the Shanghai Stock Exchange's benchmark market-making corporate bond index, primarily composed of high-quality AAA-rated bonds issued by central and state-owned enterprises, ensuring liquidity and low credit risk [2] - Under the new regulatory framework and "benchmark market-making" mechanism, credit bond ETFs are transitioning from a single allocation tool to a composite product with trading and financing functions, which is expected to enhance market recognition and investment enthusiasm [2] - The ongoing demand for high-rated credit bonds amid the current "asset shortage" environment, combined with the pledge mechanism and T+0 trading convenience, is likely to improve liquidity in the credit bond market and optimize the bond market ecosystem [2]

Core Viewpoint - The banking sector has shown strong performance post the Dragon Boat Festival, with significant gains in both A-shares and H-shares, driven by the inclusion of certain banks in core market indices and a favorable low-interest-rate environment [1][2][3]. Group 1: Market Performance - On June 3, the banking sector saw a collective rise, with the A-share market capitalization of banks exceeding 10 trillion yuan, marking a 630 billion yuan increase from the beginning of the year [6][8]. - The banking index rose by 2.5% on June 3, closing with a 1.98% increase, ranking fourth among 31 Shenwan primary industries [2][3]. - Individual stocks such as Shanghai Rural Commercial Bank and Chongqing Rural Commercial Bank reached new highs, with the former hitting the daily limit up [2][3]. Group 2: Index Inclusion Impact - The strong performance of the banking sector is attributed to the inclusion of Shanghai Rural Commercial Bank and Chongqing Rural Commercial Bank in major indices like the CSI 300 and SSE 180 [3][4]. - The adjustment of index samples is expected to attract significant passive fund inflows, as these indices are closely linked to large-scale ETF products [4][6]. Group 3: Investment Trends - The banking sector has become a favored choice for risk-averse investors, with discussions around the attractiveness of bank stocks compared to traditional savings and investment products intensifying [1][9]. - The sector has seen a nearly 10% increase year-to-date, contrasting with a decline in the broader market [6][9]. - Analysts suggest that the current investment trend is supported by a combination of high dividend yields and a shift in institutional investment strategies towards banking stocks [8][11]. Group 4: Future Outlook - The low-interest-rate environment and ongoing asset scarcity are expected to sustain the appeal of bank stocks, with analysts predicting a potential recovery in price-to-book ratios for quality banks [10][11]. - The anticipated reforms in public funds are likely to further enhance the allocation towards banking stocks, contributing to continued price increases [8][9].

Core Viewpoint - The bond market is experiencing a weak consolidation phase, with significant differences in conditions compared to the first quarter, leading to expectations of a more favorable monetary policy environment in the second and third quarters of the year [1][6]. Market Performance - On June 3, the majority of government bond futures closed lower, with the 30-year main contract up 0.03% at 119.45, while the 10-year main contract fell 0.03% to 108.69 [2]. - The interbank yield on major rate bonds mostly rose slightly, with the 10-year government bond yield at 1.6750% remaining flat, while the 30-year government bond yield increased by 1.25 basis points to 1.931% [2]. Overseas Bond Market - In North America, U.S. Treasury yields rose across the board, with the 10-year yield increasing by 3.76 basis points to 4.440% [3]. - In Asia, Japanese bond yields showed mixed results, with the 5-year and 10-year yields declining, while the 20-year yield rose by 0.8 basis points to 2.41% [3]. - In the Eurozone, 10-year bond yields for France, Germany, Italy, and Spain all increased, indicating a general upward trend in yields [3]. Primary Market - The results of the second local bond issuance in Hebei Province showed a bidding multiple exceeding 20 times, with the 10-year bond yielding 1.75% and a total bid multiple of 20.31 [4]. Funding Conditions - The central bank conducted a 7-day reverse repurchase operation of 454.5 billion yuan at an interest rate of 1.40%, resulting in a net withdrawal of 375.5 billion yuan for the day [5]. - Short-term Shibor rates mostly declined, with the overnight rate down by 6.1 basis points to 1.41% [5]. Institutional Perspectives - Institutions believe that the current market fluctuations may present more opportunities than risks, with expectations of a new downward trend in interest rates after mid-June [6][7]. - There is a potential for a "liquidity crunch" post-quarter-end, which could improve market supply-demand dynamics [6]. - Credit bonds are currently outperforming government bonds, as non-bank institutions are reallocating deposits towards credit bonds and repos, leading to higher yields in the bond market [7].

Core Viewpoint - The recent wave of fee reductions by bank wealth management subsidiaries is a response to the decline in deposit rates, aiming to attract more investments into wealth management products while facing pressure from lower returns on these products [2][8]. Group 1: Fee Reductions by Wealth Management Subsidiaries - Multiple bank wealth management subsidiaries, including Bank of China Wealth Management and CCB Wealth Management, have significantly reduced their product fees, with some fees dropping to as low as 0.01% [2][4]. - Bank of China Wealth Management announced a reduction in fixed management fees from 0.15% to 0.01% for specific products, indicating a substantial decrease in costs for investors [4]. - Other banks, such as CCB and Hunan Bank, have also announced similar fee reductions, with management fees adjusted from 0.20% to 0.05% and from 0.60% to 0.50%, respectively [5][6]. Group 2: Market Dynamics and Trends - The total scale of bank wealth management products has exceeded 31 trillion yuan, reflecting a recovery in the market [7]. - Analysts suggest that the current fee reductions are driven by two main factors: the migration of deposits to wealth management products due to lower deposit rates and the need to retain existing investors amid declining product performance benchmarks [8]. - The low interest rate environment is expected to deepen, leading to a structural "asset shortage" and pressuring wealth management firms to diversify their asset allocation strategies [8]. Group 3: Performance Benchmarks and Product Issuance - The performance benchmarks for bank wealth management products have declined, with 1-3 month products showing a benchmark of 2.28%, down 9 basis points from the previous month [10]. - In April, the issuance scale of bank wealth management products was 556 billion yuan, a decrease of 158.8 billion yuan from the previous month, indicating a slight contraction in new product offerings [9].

Core Viewpoint - A new round of banks lowering deposit rates has led to a wave of fee reductions by wealth management subsidiaries, with some fees dropping to as low as 0.01% [1][2][5] Group 1: Fee Reductions by Wealth Management Subsidiaries - Multiple wealth management subsidiaries, including Bank of China Wealth Management and China Merchants Bank Wealth Management, have announced significant fee reductions for their products, with management fees as low as 0.01% [2][4] - Bank of China Wealth Management has issued 27 announcements regarding fee reductions since May, with specific products seeing management fees drop from 0.15% to 0.01% [2] - Other banks, such as Hunan Bank and Everbright Wealth Management, have also adjusted their fee structures, with some fees being eliminated entirely [3][4] Group 2: Market Dynamics and Trends - The reduction in fees is attributed to two main factors: the decrease in deposit rates leading to a shift of funds into wealth management products, and the need to retain existing investors amid declining product performance benchmarks [5][6] - The total scale of bank wealth management products has exceeded 31 trillion yuan, indicating a recovery in the market [6] - The wealth management market is undergoing strategic adjustments in response to a low-interest-rate environment, characterized by increased competition and a shift towards multi-asset allocation [6][7] Group 3: Performance Benchmarks and Product Issuance - The performance benchmarks for bank wealth management products have declined, with various product categories experiencing drops in their annualized returns [7] - In April 2025, the issuance scale of bank wealth management products was 556 billion yuan, reflecting a decrease from the previous month [6]

Core Viewpoint - The banking sector is experiencing a significant rally, driven by high dividend yields and a favorable interest rate environment, making it an attractive investment option [1][4][6] Group 1: Market Performance - The banking sector saw a trading volume of 222.5 billion yuan, indicating strong investor interest [1] - The A+H bank ETF has increased by 13.3% year-to-date and has set seven historical highs, with fund shares growing by 78 million [1][4] - The bank AH index has outperformed the CSI 300 and the CSI Dividend Index, suggesting continued upward potential [4] Group 2: Financial Metrics - The one-year fixed deposit rate is 0.95%, while the five-year rate is 1.3%, and the ten-year government bond yield is only 1.73%, highlighting the attractiveness of bank stocks with 4-6% dividends [1] - The banking sector's average net profit growth over the past ten years is 4.5%, with a variation coefficient of 78.6%, indicating stable earnings compared to other industries [5] - The projected return on equity (ROE) for the banking sector in 2024 is 9.3%, with a price-to-book (PB) ratio of 0.61x, suggesting undervaluation relative to other sectors [6] Group 3: Investment Trends - Insurance companies are increasingly investing in high-dividend stocks, particularly in the banking sector, as part of their asset allocation strategy [1] - The introduction of public fund quality development plans is seen as a positive factor for the stable and low-volatility banking sector [5]