The three major indices closed collectively lower, with the ChiNext Index at one point falling over 2%. The total trading volume for the Shanghai and Shenzhen markets was 2.78 trillion yuan, an increase of 69.4 billion yuan from the previous trading session. In terms of market performance, more than 3,100 stocks declined across the board. Sector-wise, the chemical sector bucked the trend with a strong breakout, seeing over ten constituent stocks hit the daily limit-up, including Hongbaoli, Shandong Heda, Weiyuan Shares, and Hongqiang Shares. The precious metals concept continued its strong performance, with Hunan Silver rising by the limit. The real estate sector was also active, with Grandjoy and Cheng Tou Holdings hitting the limit-up. The AI application segment saw localized gains, with Jiayun Technology, Yue Media, and Zhewen Interconnected all rising by the limit. On the downside, computing power hardware and commercial aerospace sectors led the declines. Specifically, commercial aerospace concept stocks collectively plummeted, with Shenjian Shares falling by the limit for four consecutive sessions and Aero Engine Corporation of China dropping by the limit for two sessions. At the close, the Shanghai Composite Index was down 0.01%, the Shenzhen Component Index fell 0.97%, and the ChiNext Index declined by 1.79%.
During today's broker morning meetings, China Securities Co., Ltd. expressed the view that rising enthusiasm in the domestic computing power sector is driving the semiconductor equipment segment. Guosheng Securities believes that the maturity of a "massive" amount of household deposits will bring incremental funds to the equity markets again. CICC suggests paying attention to trading opportunities within the real estate sector.
China Securities Co., Ltd. states that against the broader backdrop of a general slowdown in industry capacity expansion, penetration rate increases driven by localization remain a crucial source of future growth for the equipment sector. The domestic equipment localization rate is expected to accelerate rapidly, with leading integrated equipment companies potentially seeing order growth of 20-30% or more by 2025. The localization process for components, especially those critical bottleneck components, is anticipated to speed up, indicating a generally positive fundamental outlook for the sector. Regarding industry sentiment, front-end CAPEX is still forecast to grow before 2025, with advanced processes maintaining strong performance and mature processes showing signs of recovery. Back-end packaging is experiencing a mild recovery, with positive developments expected in 2.5D/3D advanced packaging in the second half of the year. In terms of import substitution, demand from major clients remains strong, and clients not on restricted lists are also accelerating the adoption of domestic alternatives, suggesting a steeper trajectory for future localization rate increases. Equipment manufacturers are also rapidly advancing the localization of their supply chains.
Guosheng Securities points out that the scale of maturing medium to long-term household and corporate deposits in 2026 will be 58.3 trillion yuan, an increase of 5.6 trillion yuan compared to 2025. Specifically, maturing household deposits will reach 37.9 trillion yuan, up by 4.3 trillion yuan from 2025, marking the highest level in nearly five years. In terms of timing, a significant portion of these fixed deposits for both households and corporations, 54%, is concentrated in the first quarter of 2026. For household deposits alone, over 60% of the maturing amount is due in Q1. The repricing accompanying these maturities is expected to help alleviate pressure on bank interest margins. Under ideal conditions, this could reduce bank liability-side costs by approximately 550 billion yuan, driving down the bank payment rate by 31 basis points. However, the reallocation of these matured deposits might also cause some instability on the liability side for banks. On the asset side, the large-scale maturity of household deposits in 2026 is poised to inject incremental funds into the equity markets, potentially benefiting the stock market. This is especially pertinent given the concentration of maturities in the first quarter, raising the possibility that the typical "Spring躁动" (Spring躁动) rally could exceed expectations. For the bond market, the impact of this deposit shift on actual bond allocation strength and term spreads remains to be seen.
CICC advises that, considering the recent increased frequency and density of real estate policies, and despite continued weakness on the demand side, some initial positive changes are emerging on the supply side. It is recommended to moderately increase attention on the real estate sector in the short term, adjusting the stance dynamically based on changes in natural inventory levels and the progress of policies regarding the acquisition of existing housing stock.
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