A[Bank sector fluctuates and strengthens Bank of China and Industrial and Commercial Bank of China both hit record highs] On October 8, the banking sector fluctuated and strengthened during the session. Bank of China, Industrial and Commercial Bank of China, and Bank of Hangzhou hit record highs within the day. China Everbright Bank, Ping An Bank, Bank of Beijing, Bank of Communications, etc. rose. On the news front, data show that the 42 A-share listed banks achieved a total operating income of approximately 3.14 trillion yuan in the first half of the year, a year-on-year increase of 7.42%; the total net profit attributable to parent companies was approximately 1.13 trillion yuan, a year-on-year increase of 2.96%. Among them, 32 banks achieved double growth in operating income and net profit attributable to parent companies, accounting for 76.19%. B[Moody's Ratings Upgrades the Ratings of Four Leading Brokers] On October 6, Moody's Ratings recently raised the long-term issuer ratings of four brokerages from Baa1 to A3. The four securities firms are: CICC, CICC International, CITIC Securities and Cathay Haitong Securities. In addition, a few days ago, the international rating agency S&P raised the rating of China's securities industry. Moody's Ratings said the rating actions on the above brokers reflected Moody's belief that these companies have an increased likelihood of receiving official support if necessary. These companies are increasingly strategically important to China in achieving national economic and financial policy goals, and play an important role in the operation and development of China's capital markets. Many leading brokerages responded to this. CITIC Securities stated that it will take this rating upgrade as an opportunity to further expand overseas financing channels, reduce cross-border capital costs, continue to enhance international credibility and brand influence, accelerate the construction of first-class investment banks and investment institutions, continue to empower the real economy, and help build a financial power. (Securities Times) B[Hong Kong Monetary Authority President Yu Weiman: The softness of the Hong Kong dollar exchange rate mainly reflects the influence of two major factors] On October 6, the official website of the Hong Kong Monetary Authority published an article "Recent Trends in the Hong Kong Dollar" by the President of the Hong Kong Monetary Authority Yu Weiman. The article pointed out that last month, the Federal Reserve raised interest rates for the first time in three years, the interest rate gap between Hong Kong and the United States widened, and the exchange rate of the Hong Kong dollar weakened. This mainly reflects the influence of two major factors, the carry trade induced by the widening interest rate difference between the Hong Kong dollar and the US dollar, and the fall in demand for Hong Kong dollars related to the stock market.
The Hong Kong exchange rate generally fluctuated between 7.8300 and 7.8380 from April to May. It has gradually weakened since mid-June and has recently hovered around 7.8460-7.8475, getting closer to the "weak-side convertibility guarantee" of 7.8500.
Yu Weiman said that as far as the current situation is concerned, if Hong Kong and the United States maintain a significant interest rate difference, the automatic interest rate adjustment mechanism of the linked exchange rate system will cause the Hong Kong dollar to weaken, and even trigger the "weak-side convertibility guarantee", which will cause the aggregate balance of the banking system to decline, the Hong Kong dollar interbank interest rate to gradually increase, and the Hong Kong dollar exchange rate to stabilize between 7.75-7.85 per US dollar exchange guarantee level. This is the design of the linked exchange rate system and its effective normal operation. However, whether and when the "weak-side exchange guarantee" will be triggered is affected by the above-mentioned factors and is difficult to predict accurately.
In addition, Yu Weiman also said that in the current uncertain global economic and financial environment and frequent changes in capital flows, the Hong Kong Monetary Authority will closely monitor the financial market conditions and maintain Hong Kong's currency stability through the linked exchange rate system. As for deposit and loan interest rates, banks generally consider factors such as the supply and demand for funds in the interbank market, interbank interest rates and current relevant interest rate levels, as well as their own capital cost structure, to assess whether and how much adjustment is needed. B[The World Bank raises its economic growth forecast for the East Asia and Pacific region this year] On October 6, the World Bank released an updated economic forecast report for the East Asia and Pacific region on the 6th, raising the economic growth forecast for the region in 2026 to 4.5%, 0.3 percentage points higher than the April forecast.
The upward revision to economic growth is largely due to the country's strong performance in high-tech investment and exports as part of the artificial intelligence value chain, the report said. The drag from high energy prices was less severe than expected, thanks to a combination of market forces, increased use of renewable energy, drawing down inventories and consumer subsidies.
The World Bank said that economic growth in many economies in the region this year has exceeded previous expectations, driven by the manufacturing and export of high-tech products. Among them, the economic growth forecasts for Vietnam, Malaysia and Thailand this year have been raised by 1.1 percentage points, 0.7 percentage points and 0.7 percentage points respectively. The economic growth forecast for Pacific island countries, which are sensitive to high energy prices and have limited buffers against external shocks, has been lowered by 0.5 percentage points this year.
Carlos Felipe Jaramillo, World Bank Vice President for East Asia and the Pacific, said that global artificial intelligence-related activities have increased significantly, and the East Asia and Pacific region has benefited from its deep integration with global value chains. The challenge now is to translate the region’s strengths in producing AI-related goods into widespread AI applications that boost productivity and lead to more and better jobs. B[CITIC Construction Investment: Looking forward to October, performance has entered the verification period, and overseas liquidity pressure has been marginally eased] On October 5, CITIC Construction Investment Securities Research Report pointed out that the overall adjustment of A-shares in September, the tightening of overseas liquidity and the digestion of the valuations of sectors with higher previous gains, the direction of growth and resources has retreated significantly, and low-level sectors such as real estate, medicine, and banks are relatively dominant. Looking forward to October, overseas liquidity pressure has eased, the market has entered a period of intensive disclosure of third quarter reports, and the importance of fundamental verification has further increased. It is expected that the profit of the technology sector will maintain a high growth rate in the third quarter report, and the profit expectations of some industries such as resource products, pharmaceuticals and non-bank finance will also improve; in terms of high-frequency boom, AI hardware will continue to have a high boom, energy prices will remain strong, and the mid-term supply and demand logic of industrial metals will still be supported. After the adjustment in September, the valuation pressure on some high-prosperity industries has been relieved. In terms of allocation, it is recommended to focus on AI hardware with high performance certainty, industrial metals, coal, oil and gas and basic chemicals supported by supply constraints and improved profits, as well as innovative drugs with good industry trends and securities insurance with low valuations and improved profits. B[The Shanghai Clearing House announced the phased reduction and exemption arrangement for bond business fees] On September 30, the Inter-bank Market Clearing House Co., Ltd. issued a notice that the company will reduce or reduce the following bond business fees from October 1, 2026 to December 31, 2028: First, it will continue to exempt all bond issuance registration fees, halve the interest payment and redemption service fees, and further exempt panda bond interest payment and redemption service fees. The second is to implement a 10% discount on the settlement and transfer fees of cash bonds, and a 15% discount on the settlement and transfer fees of pledged repurchase (local currency), buyout repurchase (local currency), bond lending, and bond forwards. This measure applies to bond full settlement business. Third, on the basis of the second preferential treatment, a further 20% discount will be implemented on the settlement transfer fee of spot securities transactions made by market makers through market making (i.e., it will be charged at a 72% discount to the current charging standards). The identification and identification of market making transactions by market makers shall be based on the market making transaction data provided by the China Foreign Exchange Trading Center (National Interbank Funding Center). This discount is calculated on a quarterly basis and will be deducted from the full settlement business expenses incurred in subsequent quarters. A[The banking sector fluctuated and strengthened, Bank of China rose nearly 2% to hit a record high] On September 30th, the banking sector fluctuated and strengthened in the afternoon. Bank of China rose nearly 2%, hitting a record high. The total market value of A+H shares reached 2.05 trillion yuan. Bank of Chengdu, Shanghai Pudong Development Bank, Ruifeng Bank, Qilu Bank, etc. rose by more than 2%. In terms of news, so far, 20 A-share listed banks have disclosed or implemented their 2026 mid-term profit distribution plans, with a total planned cash distribution of approximately 266.113 billion yuan, a year-on-year increase of approximately 12.03%. B[Guangzhou: Increase development loan support for existing home sales projects and safe, comfortable, green and smart "good house" projects] On September 30, the Guangzhou Municipal Housing and Urban-Rural Development Bureau, the Guangzhou Municipal Planning and Natural Resources Bureau, and the Guangdong Supervision Bureau of the State Financial Supervision and Administration Bureau issued implementation opinions on the implementation of the "Notice on Improving the Commercial Housing Sales System." For projects that implement existing home sales and pre-sales, the reasonable financing needs of the projects shall be met in accordance with market-oriented principles, and development loan issuance shall be matched with the project construction cycle. Increase support for development loans for existing home sales projects and safe, comfortable, green and smart “good house” projects. The lending bank should reasonably determine the investment node and amount based on the project construction progress, and issue development loans in batches. The loan funds should be entrusted to be paid to the account of the project company's transaction partner through the capital account opened at the host bank, and all of them will be used for project construction. B[Vice Minister of Finance Liao Min attended the 25th Ministerial Meeting of the Central Asian Regional Economic Cooperation Mechanism] September 30th, the 25th Ministerial Meeting of the Central Asian Regional Economic Cooperation (CAREC) Mechanism was held on September 29th in Ulaanbaatar, the capital of Mongolia. Vice Minister of Finance Liao Min led a delegation to attend the meeting and delivered a speech. Liao Min said that since its establishment 25 years ago, the CAREC mechanism has achieved remarkable results in promoting regional cooperation and promoting common development. China is willing to leverage its industrial advantages and work with member states to deepen regional connectivity, consolidate and expand cooperation in key areas, promote the development of digitalization and artificial intelligence, strengthen the coordination and docking of the CAREC mechanism with the Belt and Road Initiative, global development initiatives, and global governance initiatives to form development synergies, and promote CAREC cooperation to achieve more practical results. Liao Min pointed out that China's economy is operating generally stably this year, with economic growth reaching 4.7% in the first half of the year, demonstrating strong resilience and vitality. China has the confidence, ability and conditions to maintain stable and healthy economic development and achieve a good start in the "15th Five-Year Plan". China will unswervingly expand high-level opening up to the outside world and is willing to share opportunities with all parties and make greater contributions to promoting regional sustainable development and common prosperity. During the meeting, Liao Min held bilateral meetings or exchanges with Enkhbayar Jadamba, First Deputy Prime Minister and Minister of Economic Development of Mongolia, Masato Kanda, President of the Asian Development Bank, and others. B[Guangfa Bank was fined and confiscated over 17.14 million yuan Ten illegal acts involving financial statistics, credit reporting and anti-money laundering] On September 24th, the People's Bank of China recently disclosed administrative penalty information. China Guangfa Bank was found guilty of violating financial statistics, account management, liquidation, bank card acquiring, data security, anti-counterfeiting currency and other management regulations, as well as occupying financial deposits. For 10 illegal acts, including deposits or funds, violation of credit information management regulations, failure to perform customer identification obligations as required, and failure to submit large transaction reports as required, the company was warned, had illegal gains of 16,200 yuan confiscated, and was fined 17.124 million yuan, for a total fine of approximately 17.14 million yuan.
In addition, 12 relevant responsible personnel were punished at the same time, with fines ranging from 10,000 yuan to 160,000 yuan respectively, for a total fine of 560,000 yuan. Among them, Jiang from the Asset Custody Department of China Guangfa Bank was given a warning and fined 160,000 yuan for being responsible for violating bank card acquiring business management regulations. B[Bohai Bank was fined and confiscated over 5.4 million yuan for 11 violations] On September 24, the People's Bank of China recently disclosed administrative penalty information. Bohai Bank was warned for violating 11 relevant management regulations such as financial statistics, bank settlement accounts, collection services, bank card acquiring, network security, and data security. Its illegal gains of 85,100 yuan were confiscated and fined 5.3437 million yuan. The total fine was 5.4288 million yuan. In addition, the People's Bank of China imposed fines ranging from 10,000 yuan to 50,000 yuan on seven relevant responsible personnel of Bohai Bank. Among them, one person was fined 50,000 yuan for violating regulations on collection business management, and several others were punished for issues such as credit information collection, customer identification, and reporting of large-value transactions or suspicious transactions. B[The Central Bank warned, notified and criticized the Postal Savings Bank of China and fined it 17.43 million yuan for ten violations of laws and regulations] On September 24, the People's Bank of China issued Silver Penalty Jue Zi [2026] No. 88, warning, notifying and criticizing the Postal Savings Bank of China Co., Ltd., confiscating illegal gains of 0.02902 million yuan, and imposing a fine of 17.433 million yuan. Illegal behaviors include violations of financial statistics, account management, bank card acquiring, data security, anti-counterfeit currency and other management regulations, as well as occupying fiscal deposits or funds, failing to perform customer identification obligations as required, failing to submit large transaction reports or suspicious transaction reports as required, conducting transactions with unidentified customers, etc. B[Jiangsu Bank was fined 9.37 million yuan Involving 13 violations of laws and regulations] September 24th, the People's Bank of China recently disclosed administrative penalty information. Bank of Jiangsu was warned, criticized, confiscated 17,822 yuan of illegal income, and fined 9.371 million yuan for violating management regulations on financial statistics, account management, acquiring business, collection agency business, data security, network security, etc., as well as occupying fiscal deposits or funds, and failing to perform customer identification obligations as required. In addition, the People's Bank of China imposed fines ranging from 10,000 to 200,000 yuan on six relevant responsible personnel, and one of them was fined 200,000 yuan for violating regulations on acquiring business management. A[Central Bank: We must continue to implement a moderately loose monetary policy and increase countercyclical adjustments] On September 24, the Monetary Policy Committee of the People's Bank of China for the third quarter of 2026 (the 114th in total) regular meeting was held on September 19. The meeting analyzed the domestic and international economic and financial situations and believed that the current external environment is more complex and changeable, with weak world economic growth momentum, frequent geopolitical conflicts and economic and trade frictions, divergent economic performance of major economies, and uncertainties in inflation trends and monetary policy adjustments. China's economy is generally operating stably, with new momentum, improved structure, and new results in high-quality development. However, it still faces problems and challenges such as strong supply and weak demand, structural differentiation, and external shocks. It is necessary to continue to implement a moderately loose monetary policy, increase countercyclical adjustments, better utilize the dual functions of monetary policy tools in terms of total volume and structure, strengthen the coordination of monetary and fiscal policies, and promote stable economic growth and a reasonable recovery in prices.
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