Market Recap: In November, after hitting a new high, the market experienced fluctuations but maintained a consolidation pattern. Diplomatic progress was noted as U.S. and Chinese leaders held another phone call, with former President Trump announcing plans to visit China next year, signaling potential further easing of bilateral tensions. Meanwhile, expectations for a Fed rate cut in December resurged following dovish remarks from officials, improving liquidity prospects. Investors await year-end policy signals from China’s Central Economic Work Conference and the next Fed chair appointment.
Key Market Drivers: 1. **Mutual Funds**: Equity-focused fund issuance rebounded. November saw new equity-oriented fund launches rise to 71.64B units (up 16.82B MoM), hitting a 3-year high at the 94.44th percentile. Active equity funds contributed 25.5B units (+9.61B MoM), while passive funds added 28.89B units (+6.35B MoM). ETF net inflows fell to 17.7B yuan (-33.59B MoM), with broad-based ETFs seeing outflows but thematic/strategy ETFs attracting inflows.
2. **Private Funds**: Assets under management (AUM) surged to 7.01T yuan in October (+MoM), though new equity product launches dipped slightly to 995 (vs. 1,048 in September). Hedge fund equity exposure rose to 66.22% in September (+2.4 ppts MoM), reflecting improved risk appetite.
3. **Northbound Flows**: Daily average turnover via Stock Connect dropped 14.35% MoM to 221.24B yuan, with its share of total A-share trading sliding to 11.56%. Overseas-listed China ETFs showed muted activity, with net flows ranging from -$49M to +$59M.
4. **Margin Trading**: Outstanding balances edged down 0.52% MoM to 2.47T yuan by end-November, with net outflows of 12.61B yuan. Sector-wise, power equipment and chemicals saw inflows, while tech and finance faced cuts.
5. **Institutional Participation**: Shanghai exchange institutional accounts surged 28.49% YoY to 9,700, while retail accounts (-11.86% YoY) rebounded to 2.37M, marking the highest level since April 2025.
6. **Insurance Capital**: Equity holdings jumped by 863.99B yuan in Q3 2025, lifting the allocation ratio to 15.49% (+1.96 ppts QoQ). Regulatory easing, including a 10% risk factor cut for stock investments, bolstered inflows.
7. **Wealth Management Products (WMPs)**: Issuance volume spiked 35.73% MoM to 6,651, with net issuance (new minus maturing) nearly doubling to 3,702. Equity-linked WMPs rose to 0.92% of total issuance (+0.63 ppts MoM).
8. **Corporate Actions**: Net减持 (net减持) widened to 40.13B yuan in November, led by tech and defense sectors. Upcoming解禁 pressure peaks in December (424.55B yuan) before easing in early 2026.
9. **Trading Momentum Indicator**: The 3-entity composite gauge improved to -0.04 (42.3rd percentile since 2015), signaling moderating declines and potential entry points for foreign, leveraged, and institutional funds.
Risks: Data lags, unexpected policy shifts, and geopolitical uncertainties.
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