Market Summary:

Last week, there was generally increase over the market. SSE Composite Index (000001.SH) changed 1.90 % to 2598.85.

As for the overall market valuations, they remain at low level in a longer historical view.

Credit spread between A-rate corporate bonds and treasury bond almost unchanged. As for the spread between Shibor Rates and Treasury bonds yield, all terms (1M,6M, IY) of them experienced some fluctuations and now hold a flat structure. As for treasury bond yield, there was a slightly increase for short term yield. The interest rates are still at relatively low level.

As for exchange rate, there were depreciation for both inland and offshore rates, that CNY/USD increased 0.23% (up to 16:30 of last Friday) and CNH/USD increased 0.26%.

As for foreign fund flows via both Shanghai and Shenzhen-Hong Kong Stock Connect, last week there were both net outflows for Shanghai and Shenzhen markets. The net outflow over last week was 4.91 billion CNY and the cumulative net inflow was 569.1 billion CNY at last Friday. Specifically, more outflow in Shenzhen market than Shanghai market.

In sum, though there is a rebound over the week, there was still outflow of the fund, especially for the Shenzhen market, which kept outflow for 4 consecutive days, a signal of lack of confidence.

News:

Brokerage China reported that a cross-sectoral special group covering investment banks, capital management and credit business has been set up to discuss operational ideas, division of labor, selection of projects and investment decisions. The capital management plan will soon be established and will enter the practical stage, with capital investment not limited to its own cooperative enterprises. On the evening of October 23, the China Securities Association disclosed that 11 securities companies had reached an intent to invest 21 billion yuan to set up a parent-capital management plan, as a guide to fund the establishment of several sub-capital management plans by various securities companies, attracting investment from banks, insurance, state-owned enterprises and government platforms, forming a 100 billion yuan capital management plan. It is specially used to help listed companies with a bright prospect to ease equity pledge.

The total profit of Industrial Enterprises above the scale in September was 4.1% higher than that of the same period last year, with a preceding value of 9.2%; from January to September, the total profit of Industrial Enterprises above the scale reached 4971.34 billion yuan, an increase of 14.7% compared with the same period last year, and the growth rate slowed by 1.5 percentage points from January to August.

Statistics Bureau: In the first three quarters, the overall industrial profits maintained a relatively rapid growth, and the new profits mainly came from the steel, building materials, petroleum and chemical industries; the growth rate of industrial profits in September was slower than that in August, mainly affected by the slow growth rate of industrial production and marketing, the fall in price rise, and the high profit base of the previous year.

Minister of Commerce Zhongshan held talks with Japanese Minister of Economy and Industry Shi Genghong. The two sides exchanged in-depth views on China-Japan economic and trade relations, third-party market cooperation, innovative cooperation, anti-unilateralism and trade protectionism, regional and multilateral cooperation and other issues.

On the other side of the severe winter market, the public fund market has an unprecedented heat. As of October 24, there were 163 non-monetary ETFs in the market, with a total share of 22.25 billion, an increase of 137% over the beginning of the year. Recently, the ETF under the three public offerings of Huaxia, Boshi and Yinhua has raised nearly 50 billion yuan.

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