Market Review
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China Market
1. The People's Bank of China renews 7890 billion yuan of MLF without "cutting interest rates"
As the monetary surface continues to tighten due to factors such as government bonds and credit, the central bank chose to increase the amount of funds injected in the October MLF renewal. At the same time, since the winning bid rate remained unchanged, it is widely expected that this month's Loan Market Quotation Rate (LPR) will likely remain unchanged. In October's Medium-term Lending Facility (MLF) operation, the central bank conducted 7890 billion yuan of MLF operations, marking the second consecutive month of increasing MLF net disbursements. The net disbursement in October was 2890 billion yuan, further expanding from September's 1910 billion yuan basis.
2. State-owned enterprises lead a new wave of buybacks and share increases in the A-share market
Several A-share listed companies have announced share buybacks, investing real money to boost market confidence. To date, eighteen listed companies have announced stock buybacks or issued share increase announcements. The companies involved in this round of concentrated buybacks and share increases are mostly state-owned enterprises, ranging from companies with market values of hundreds of billions to trillions, which are industry leaders and are expected to serve as benchmarks and lead by example, encouraging more listed companies to join the buyback and share increase movement.
3. The Shanghai and Shenzhen Stock Exchanges plan to organize a concentrated roadshow for listed companies in 2023
In accordance with the unified deployment of the China Securities Regulatory Commission, the Shanghai Stock Exchange plans to organize more than 50 companies from the main board and the STAR Market to conduct a concentrated roadshow, showcasing the good practices of Shanghai listed companies in implementing new development concepts, building a new development pattern, and achieving high-quality development. This activity is an important effort by the Shanghai Stock Exchange to implement the Central Party Committee's requirements to invigorate the capital market, boost investor confidence, and is an active attempt to promote synergy among investment, financing, and trading.
4. Hong Kong banks trigger another wave of interest rate hikes
Hong Kong's major banks have sequentially increased deposit interest rates since last month, prompting both large and small banks to follow suit. After about two weeks of silence, HSBC suddenly increased its deposit interest rates last Friday, raising the three-month Hong Kong dollar time deposit annual interest rate to as high as 4.5%, with HSBC One or other customers getting up to 4.3%. Bank of China (Hong Kong) immediately followed HSBC's lead, also raising its three-month deposit rate to 4.5%. Considering multiple banks, the highest interest rate for a six-month deposit period is currently 4.8%, with a starting threshold higher than HSBC, Bank of China, and Hang Seng, for instance, Fubon Bank’s 4.8% requires new funds of HK$500,000, and Bank of East Asia's 4.7% requires a starting deposit of HK$2,000,000. Regarding lower threshold deposits starting from HK$10,000, HSBC, Bank of China, and Hang Seng’s 4.5% is the highest interest rate offered.
Overseas Market
1. Biden warns Israel against reoccupying Gaza
In an interview with CBS's "60 Minutes," US President Biden warned Israel against reoccupying Gaza, calling it a "mistake." This is the first major attempt by Biden to restrain his ally in public since the new round of conflict between Israel and Palestine. Meanwhile, Iran's foreign minister warned that if Israel decides to enter Gaza, Hamas will turn Gaza into a graveyard for the occupiers.
2. US Treasury Secretary Yellen says high interest rates in the US may persist
US Treasury Secretary and former Federal Reserve Chair Janet Yellen stated that the US economy is in good shape, suggesting that high interest rates in the US may persist. Yellen's remarks on US interest rates differ slightly from her public stance in early October, when she stated that it was "not a given" that US rates would remain at a higher level for an extended period. On the same day, European Central Bank President Christine Lagarde mentioned that she is monitoring oil prices to assess the impact of the Israel-Palestine conflict on inflation.
3. US SEC Chair says AI threatens financial stability
How far-reaching is the power of AI? US regulatory bodies are starting to worry about AI threatening financial stability. Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), recently told the media that if swift regulatory measures are not implemented, a financial crisis triggered by artificial intelligence in the next decade is "almost inevitable." Gensler is concerned that decision-making based on the same data models could lead to herding behavior, thereby undermining financial stability and triggering the next crisis.
4. Russia to increase oil export tariffs by 10% in November
The Russian Ministry of Finance announced that Russia will raise the export tariffs for crude oil and fuel oil by 9.6% to $26.2 per ton in November, reaching the highest level so far this year. However, multiple media reports indicate that the Biden administration and Venezuela's Maduro government have reached an agreement under which the US will relax sanctions on Venezuela's oil industry in exchange for Venezuela conducting fair and supervised presidential elections next year.
Focus for Today
Today, investors should pay attention to various economic data such as China's pipeline natural gas imports, the UK unemployment rate, the Eurozone and Germany ZEW economic sentiment index, US retail sales and core retail sales, industrial output, Canada's CPI and core CPI, among others. In addition, investors should also keep an eye on the situation in Israel and Palestine, speeches by New York Fed President Williams, and Richmond Fed President Barkin, among other risk events.
