A-shares demonstrated steady strength today. The Shanghai Composite Index rose by 0.52% to close at 4106.26 points, while the Shenzhen Component Index gained 1.30%. The ChiNext Index advanced by 1.73%, and the STAR Market Composite Index increased by 1.75%. The combined trading volume for the Shanghai and Shenzhen exchanges reached 2.6 trillion yuan, an increase of 151.2 billion yuan compared to the previous session. Sector-wise, AI-related technology sectors led the gains, with communications, consumer electronics, computers, and power grids among the top performers. In contrast, film and television, aquaculture, and Hong Kong stock-related sectors declined. Market risk appetite appeared robust today, with over 2,900 stocks rising across the board. In terms of market style, small-cap stocks outperformed large-caps, though micro-caps were relatively weak. Growth stocks surpassed value stocks, and the ChiNext and STAR markets outperformed the main board. Overall, market risk appetite was strong.
Today marked a highlight for A-shares, with the computing hardware industry chain seeing broad-based gains. The Communication ETF (515880) surged by 5.61%, and the ChiNext Artificial Intelligence ETF (159388) jumped by 4.68%.
In the communications sector, the core market logic currently revolves around AI computing power catalyzing a non-linear explosion in demand for high-speed optical connectivity. The entire optical communication industry chain has entered a seller's market, characterized by rising volumes and prices, with high景气度 sustained. The long-term narrative and short-term performance of optical modules are currently in sync. It is anticipated that the optical module market size will nearly double by 2026 and grow by approximately another 100% by 2027. In the short term, recent earnings from leading companies have exceeded expectations, suggesting the potential for strong growth this year. Looking further ahead, the optical module market is expected to maintain high double-digit percentage growth from 2028 to 2029. The Communication ETF (515880), which has nearly 50% exposure to optical modules, reached a new high with its significant gain today.
From a medium to long-term perspective, the AI hardware and software ecosystem is gradually becoming clearer, supported by robust global capital expenditure growth. In the short term, key AI component stocks on the Taiwan market reported substantial month-on-month and year-on-year revenue growth for March, indicating accelerated AI deployment. This suggests that Q2 earnings for the industry chain could see significant growth. The communications sector currently stands as one of the most fundamentally resilient areas within the technology板块, with considerable room for further upside and elasticity. Investors may consider持续关注 the Communication ETF (515880).
Accelerated capacity reduction is serving as a catalyst, with funds continuously flowing into the aquaculture sector recently. The Aquaculture ETF (159865) has seen net inflows exceeding 1.3 billion yuan over the past ten days.
On April 17, Han Jun, Party Secretary and Minister of the Ministry of Agriculture and Rural Affairs, presided over a symposium on the pig farming industry, signaling high-level attention to the sector. Currently, pig prices have fallen to levels seen in 2018, and the number of breeding sows has declined for nine consecutive months since July 2025. In March 2026, the number of newborn piglets saw its first year-on-year decrease in 17 months, indicating ongoing capacity reduction. The meeting notably emphasized promoting capacity control alongside enhanced environmental supervision. Specific policies primarily target large-scale farming enterprises, introducing for the first time constraints based on their asset-liability ratios. The policy focus has shifted from controlling the breeding sow inventory to managing slaughter volumes and piglet numbers, urging the accelerated culling of weaker animals.
Furthermore, potential disease-related factors loom. Foot-and-mouth disease from southern regions could potentially spread to pigs. While this disease is not fatal to adult pigs, it often causes oral ulcers and foot lesions. However, it has a high mortality rate (30%-100%) for piglets and can cause abortions in sows. Given the current low pig prices, farming enterprises have limited willingness and capability for prevention, making strict isolation measures or vaccine development and procurement unlikely. If the disease spreads, it could impact supply approximately ten months later, potentially driving up pig prices. However, the outbreak is currently concentrated in northwestern regions, and the availability of a vaccine remains uncertain, making this a potential catalyst rather than a certainty.
The trend of low pig prices for the full year is already established, and the likelihood of accelerated capacity reduction appears set. Expectations for a cyclical turnaround continue to strengthen. A direct price increase in the first half of the year seems improbable; the current price rebound should be viewed as temporary, with a high probability of a secondary price dip, though likely not reaching new lows. When pessimism pervades the entire industry, it might signal the starting point for the aquaculture sector.
Capital markets have recently begun pricing in the adage that 'the worst time can be the best window for positioning,' with investors提前布局 an industry reversal and持续抢筹 the Aquaculture ETF (159865). Interested investors may wish to keep this sector under observation.
The rally in long-term bonds has continued recently. The yield on the active 10-year government bond fell further to 1.73%, while the yield on the active 30-year government bond declined to 2.21%, approaching lows seen around March. Correspondingly, the 10-Year Government Bond ETF (511260) has delivered a return of 0.34% over the past five days.
From an analytical perspective, the primary driver behind this long-term bond rally remains unexpectedly loose liquidity. In terms of trading logic, ample liquidity enhances carry returns, thereby increasing the safety cushion for bond bulls. Historically, short-term liquidity has often been a pricing factor for medium to long-term bonds (10 years and below). However, considering the significant decline in 30-year bond yields, we believe the dynamic of 'narrowly-defined loose liquidity' is evolving into a narrative of 'asset scarcity.' Substantial excess liquidity from corporate foreign exchange settlements, coupled with a shortage of certain assets due to geopolitical tensions involving Iran, has made ultra-long-term bonds, which had previously seen significant yield spread repairs, relatively attractive.
From a liquidity standpoint, signals for the end of this rally might include the central bank tightening liquidity or the renminbi exchange rate stabilizing. Over the medium to long term, the potential of the rally will depend on fundamental economic conditions. Since the beginning of the year, production and exports have shown some strength, making the signs of an economic bottoming out and recovery more apparent. However, strong exports do not necessarily translate into robust financing growth, as evidenced by the continued decline in total social financing. Therefore, we believe fundamental risks are currently limited, but so is significant upside potential. A key risk lies in the property market; if it stabilizes, financing demand could rebound markedly.
We believe the tactical opportunity in long-term bonds has not yet been invalidated and holding positions may still be viable. However, we maintain a cautious stance regarding the risk-reward profile of bonds over the medium to long term. Historically, interest rates tend to rise when the broader direction of China's economic recovery becomes more evident. Therefore, we continue to advise investors to focus on stable products with moderate duration, such as the Government Bond ETF (511010) and the 10-Year Government Bond ETF (511260).
Risk Warning: Investors should fully understand the differences between systematic investment plans (like regular fund investments) and savings methods such as lump-sum deposits. Regular investing is a straightforward strategy aimed at promoting long-term investment and averaging costs. However, it does not eliminate the inherent risks of fund investing, cannot guarantee returns, and is not equivalent to saving. Whether equity ETFs, LOFs, or structured funds, these are securities investment fund products characterized by higher expected risk and higher expected returns compared to hybrid funds, bond funds, and money market funds. Funds investing in STAR Market or ChiNext stocks face specific risks due to differences in underlying investments, market systems, and trading rules; investors should take note. Short-term performance figures for sectors/funds are presented solely as supplementary material for analysis and are for reference only, not constituting a guarantee of future fund performance. Mention of short-term individual stock performance is for reference and does not constitute stock recommendation or a forecast/guarantee of fund performance. The views above are for reference only and do not constitute investment advice or a promise. When considering purchasing relevant fund products, please pay attention to regulations regarding investor suitability, complete a risk assessment beforehand, and purchase fund products that match your risk tolerance. Funds carry risks; invest cautiously.
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