When trading stocks, rely on Jin Qilin analyst research reports — authoritative, professional, timely, and comprehensive, helping you uncover potential thematic opportunities. Source: Caijing Dushu. The Sci-Tech 50 ETF from China Asset Management saw single-day turnover exceed 22 billion yuan, while the ChiNext ETF from E Fund and the CSI 300 ETF from Huatai-PineBridge each saw turnover above 19 billion yuan.
A wave of market stabilization measures has recently been implemented. On November 2, the People's Bank of China, together with the National Financial Regulatory Administration and the China Securities Regulatory Commission, held separate symposiums on the Securities, Fund, and Insurance Companies Swap Facility and on stock buyback and increased holdings relending. The meetings proposed conducting swap facility operations for securities, fund, and insurance companies in a timely manner, further expanding the number of participating institutions, appropriately lowering swap rates, and optimizing pledge and operational models.
The stock buyback and increased holdings relending policy has been converted from a temporary arrangement into a long-term institutional framework, with the relending rate reduced from 1.25% to 1%. Financial institutions are adhering to market-based pricing principles, reasonably adding margin on top of the relending rate and increasing loan disbursements.
Following the symposiums, on the evening of November 2, the CSRC released a question-and-answer session on recent work related to stabilizing the market and expectations, introducing multiple market stabilization measures and responding to market concerns. On November 3, CSRC Vice Chairman Li Chao stated at the Hong Kong International Financial Leaders Investment Summit that the regulator would make every effort to maintain the smooth operation of the capital market. "Since the beginning of this year, in the face of multiple unexpected exogenous risks and challenges, the CSRC has strengthened monitoring and market stabilization mechanisms, focused on solidifying the foundation for market stability, further improved the institutional ecosystem for long-term money and long-term investment, deepened public fund reform, and promoted a steady increase in the scale and proportion of medium- and long-term capital entering the market from social security funds, annuities, and insurance."
"The intensity of this round of market stabilization is relatively strong, but we still need to see how follow-up policies are further implemented. I am relatively optimistic about the execution and efficiency," a head proprietary equity trading manager at a leading brokerage told Caijing. Leading private fund Spring Capital said the current combination of macro conditions does not provide a basis for a sustained bear market. Loose liquidity conditions, low expectations, and a clear policy floor together form the macro support that makes it difficult for the market to shift into a sustained bear market. The sentiment pendulum has swung to an extreme pessimistic side, which is often a moment when rational market pricing fails and opportunities outweigh risks.
CSRC Introduces Multiple Market Stabilization Measures
On November 2, the CSRC laid out multiple market stabilization measures across four areas: two structural monetary policy tools, listed company buybacks, active ETFs and other investment tools, and margin trading and securities lending. Regarding the two structural monetary policy tools, the CSRC said it would work with the People's Bank of China to organize relevant market entities to make full and effective use of these two tools and coordinate their supporting role in stabilizing the market. Specifically, this includes: first, expanding the scope of participating institutions and the amount of funds for the swap facility business; second, increasing the coverage of special relending for listed company stock buybacks and increased holdings.
The CSRC disclosed that as of the end of October this year, two batches of swap facility operations had been carried out, with 28 securities companies and fund management companies participating, totaling 105 billion yuan. Across the market, 902 listed companies had disclosed 1,110 buyback and increased holdings loan announcements. Including the increased holdings loans applied for by the two state-owned capital operation companies China Reform Holdings and China Chengtong, the cumulative upper limit of loan applications has now reached approximately 440 billion yuan.
Regarding listed company buybacks, the CSRC plans to adjust and optimize buybacks necessary to safeguard company value and shareholder interests, referred to as "market-support buybacks." Specifically, this includes: first, adding stock price "below net asset value" as one of the circumstances under which market-support buybacks may be conducted, stipulating that market-support buybacks are not subject to the restriction that "the company's stock has been listed for at least six months," and removing restrictions that prohibit declarations during the opening and closing call auction periods in market-support buybacks; second, requiring listed companies within 36 months of listing to strictly and earnestly fulfill the stock price stabilization measures in their listing commitments when their stock price triggers market-support buyback circumstances; third, requiring listed companies with excess raised funds to promptly implement buybacks when market-support buyback circumstances are triggered; fourth, requiring listed companies to specify in their annual cash dividend plans a certain proportion of funds to be included in a special buyback fund, requiring listed companies with excess raised funds to include a certain proportion of excess raised funds in a special buyback fund dedicated to share buyback cancellation, and requiring listed companies to include proceeds from selling market-support buyback shares through centralized bidding into the special buyback fund.
According to data disclosed by the CSRC, in the first 10 months of this year, 645 listed companies on the Shanghai and Shenzhen markets disclosed 700 share buyback plans worth 237.7 billion yuan, of which buyback cancellation amounted to 115 billion yuan, accounting for nearly 50%. A total of 747 companies actually implemented buybacks worth 134.5 billion yuan. Buyback plan amounts, actual buyback amounts, buyback cancellation amounts, and their proportions all hit record highs. The CSRC said that next, on the basis of in-depth research and verification, it would promptly revise the Rules on Share Buybacks by Listed Companies to strengthen the binding force of market-support buybacks. Before the rules are formally revised, the CSRC will strengthen coordination and cooperation with relevant parties, support, encourage, and urge qualified listed companies, especially constituent companies of important indices and leading technology companies, to actively implement share buybacks in line with the above requirements and their own actual conditions, and to continuously improve market value management.
On the investment side, the CSRC disclosed the latest developments regarding recently launched active ETFs. The first batch of 18 active ETFs was registered on October 19 and began fundraising on October 23. As of November 2, total funds raised exceeded 35 billion yuan, with 16 products having reached the single-product fundraising cap of 2 billion yuan and completed fundraising. Next, the CSRC will guide and encourage the 18 active ETFs that have completed fundraising to accelerate investment and position building. In addition, the CSRC said it would continue to increase the supply and innovation of equity fund products and support fund managers in making countercyclical arrangements. It will launch more new index stock ETFs and enrich on-exchange investment tools. It will study and launch multi-asset index funds such as constant-proportion stock-bond funds, enrich off-exchange low- and medium-volatility products, and better meet the investment needs of different investors. It will encourage fund managers to issue more floating-rate funds and further strengthen the alignment of interests between fund managers and holders.
Regarding margin trading and securities lending, the CSRC said it would work with stock exchanges to guide securities companies in conducting coordinated research on risk control indicators such as margin deposit ratios, conversion rates of securities eligible as margin, and maintenance guarantee ratios, further optimize them, and maintain flexibility. On the basis of overall controllable risk, and in accordance with statutory countercyclical adjustment arrangements, it will appropriately release margin space, activate existing funds, and improve market liquidity. In January 2026, based on the market situation at the time, the Shanghai, Shenzhen, and Beijing exchanges raised the margin deposit ratio from 80% to 100%. Recently, margin balances and trading activity have declined significantly, and the overall leverage level has trended toward stability.
Policy Support and Market Trends
Market participants are closely tracking recent market stabilization measures. Yan Xiang, chief economist at Founder Securities, said the optimization of the swap facility and the buyback and increased holdings relending tools is an important step in consolidating and improving the construction of the capital market's market stabilization mechanism. The two tools work in concert to both enhance financial institutions' financing capacity and capital strength and strengthen listed companies' motivation for buybacks and increased holdings, bringing incremental capital into the market. At the same time, long-term institutional arrangements help eliminate concerns about policy withdrawal and stabilize market expectations.
"These policies to maintain capital market stability are good for both brokerages and investor clients," a head of a branch at a leading brokerage told Caijing. "The margin trading and securities lending measures are still under discussion and will affect margin clients. At present, most clients at the branch are still in a holding pattern, and the market needs confidence." "Although it is falling, there is still liquidity, and the market is still relatively healthy," a head of a brokerage branch in central China told Caijing. "The margin balance fell from 3 trillion yuan to about 2.3 trillion yuan over several months, implying net selling of about 700 billion yuan."
Looking ahead, both domestic and foreign institutions have offered positive views. Spring Capital believes the obvious mismatch between current stock prices and industry fundamentals is both a market signal and an investment clue worth attention. Judging by the extent of adjustment and turnover, whether AI assets or non-AI assets excluding dividend defensive plays, both have undergone fairly thorough adjustments. Previous crowded trades have also been fully unwound, market heat has clearly cooled, valuations have been substantially digested, and the number of stocks with reasonable or even undervalued valuations continues to increase, including many industry leaders. "Foreign investors remain closely focused on Chinese assets, especially representative companies in new quality productive forces, which stand out in terms of growth speed, position in the global industrial chain, and earnings relative to market expectations," Wang Ying, chief China equity strategist at Morgan Stanley, told Caijing. "If the macro narrative improves further, for example through stronger household consumption willingness, the story of investing in China can be told better and more completely."
The global AI industry and related A-share sectors are market focal points. Goldman Sachs recently released a research report titled "AI Rewrites the Landscape: China's Rise," stating that although geopolitical and trade policy risks still warrant attention, it remains bullish on Chinese AI export leaders, whose growth prospects offer good value relative to valuation. As a whole, Chinese AI export companies are expected to further expand global market share by virtue of strong cost competitiveness, manufacturing capacity and efficiency, research and development intensity, and global vision and execution capability. Looking ahead to 2027, CITIC Securities said the AI industry trend is still upward, but stock momentum may weaken, and the probability of AI hardware becoming the market's core theme for a fifth consecutive year is declining. It expects all-A non-financial profit growth to slow somewhat in 2027, but the market adjustment has already been brought forward to this year. Next year, structural turning points will increase. After a broad decline, there is no bear market — at the very least, it will be a structural market. "At a point when expectations are generally cautious, we believe the breadth of the market will instead widen next year. The process of valuation contraction across most sectors has basically been completed this year. AI investment may slow, but its crowding-out effect on other non-AI industries will diminish, the K-shaped divergence will converge, and the market will become more balanced. Improvement in the capital ecosystem will take time. Stable-return strategies represented by PB-ROE may clearly outperform prosperity-based strategies, and investors should respond actively. In terms of industries, we recommend allocating around four themes: stable returns, excellent manufacturers going global, domestic demand recovery, and new AI technology topics," CITIC Securities said.
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