Will policies boost confidence and the A-share market live up to expectations?

　　On September 24, the central bank, the State Administration of Financial Supervision, and the China Securities Regulatory Commission introduced financial support for high-quality economic development and published combined benefits, igniting enthusiasm for long-term investment in the capital market. On September 25, A-share reached a five-month high with trading volume exceeding 1.16 trillion yuan.

　　The “combination punch” of policies has significantly boosted market confidence. On September 25, Securities Times reporters visited the business departments of several securities firms, and almost all mentioned that “there were significantly more investors taking the initiative to consult.” Foreign investment banks have also stated that “this is the central bank's most comprehensive easing policy since 2015” because of optimism about the future market. However, some investors are still waiting. They are more concerned about practicing the policy and expect subsequent incremental fiscal policies.

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Liquidity significantly improved

Actively market transactions

　　After the central bank's policy was released, market liquidity improved significantly. On September 24, the trading volume of Hong Kong stocks and A-shares, increased by 143% and 154%, respectively, compared to the four-week average, igniting investors' enthusiasm for the market quickly. Goldman Sachs data shows.

　　Brokerage data also confirms this trend. The number of customer accounts and trading volume of Dongxing Securities increased by 36% and 105% respectively. This shows that policy dividends are gradually being released and the enthusiasm of market participants has increased significantly.

　　Although market sentiment is generally positive, investors are still divided. Some investors are taking a wait-and-see attitude on the long-term impact of the policy, while more investors are confident in the market prospects.

Policies support economic growth rebound

　　From a macro level, foreign-funded institutions also generally expect that the increase in stabilizing growth policies will create a good environment for stable economic growth and high-quality development.

　　Wang Tao, head chief China economist at UBS， holds the view that the regulators have announced a series of incremental policy support measures. Although policy direction easing is expected for a gradual increase in policy support in 2024, interest rate cuts and reserve requirement magnitude are slightly higher than expected. Fidelity International Asia economist Liu Peiqian said that the relevant major favorable policies introduced on September 24 are a positive boost to the market and will improve market sentiment in the short term. Policy interest rates and supporting related important measures in a one-time announcement demonstrate that regulators' attachment to supporting domestic demand is more important.

Expect incremental fiscal policies

　　“Previously, our trading volume had shrunk by 80% compared to last year. In the past two days, the daily trading volume has doubled. Now it has stabilized. We hope that the market can continue.” The general manager of a Shanghai sales department of a securities firm told reporters. Jiang Huaqiang, an investment consultant at the Beijing Dawang Road Sales Department of Dongxing Securities, points out that as investor sentiment changes gradually, securities practitioners' work confidence increases. Investor sentiment has picked up, and many customers have said they would like to come over to open margin financing or input funds. On the contrary, some investors still focus on policy implementation possibility and effectiveness, and many expect subsequent incremental fiscal policies.