Preface

On January 24th, the Chinese financial markets experienced a significant upswing following an initial dip at the opening. As the morning progressed, major indices rebounded, with the Shanghai Composite Index rising by 0.73%, the Shenzhen Component Index by 1.13%, and the ChiNext Index by 1.5%. This robust performance was reflected in both domestic and overseas markets, highlighting a strong economic sentiment.

Lazy bag

The Chinese Yuan surged alongside strong market performance, evidenced by significant gains across indices and key sectors, including technology and communication.

Main Body

The financial performance on January 24th saw a palpable upward trend in the Chinese markets, marking a robust return to investor confidence after an initial trading slump. The Shanghai and Shenzhen indices posted notable recoveries by midday, illustrating a broad-based market strength with substantial trading volumes totaling 743.916 billion yuan. A sweeping rise encompassed 3,554 stocks with positive growth, overshadowing the 1,666 stocks that declined.

Hong Kong's financial landscape mirrored this buoyancy as the Hang Seng Index climbed 1.68%, while the Hang Seng Tech Index expanded its gains to reach 2.59%. The FTSE China A50 futures also participated in the rally, achieving an intraday spike of over 1% and settling at a 0.94% increase.

The Yuan's impressive rally was another highlight, with the onshore Yuan jumping by over 300 points to a peak of 7.2450 against the US dollar, eventually stabilizing at 7.2578. The offshore Yuan similarly experienced a surge, reaching 7.2602.

Within key industry segments, software, internet services, and telecommunications equipment marked significant gains. Conversely, sectors such as highways and marine transportation faced downward pressure. The market saw a noticeable impact in AI and technology stocks. Companies like Century Tianhong and Systech Capital hit their upper trading limits, while several others like DigeSuite and Intellifusion soared more than 10%.

The optical module stocks capitalized on this positive momentum. Boda Technology surged beyond 14%, hitting a new recent high, with other players like Deco Technologies and Liantek also showing aggressive gains.

Notably, the high-speed copper cable market experienced an uptick. New Asia Electronics achieved a three-board streak, with another significant performance by Changfei Optical Fiber. Huamai Technology resisted an initial low to end on a high note, reasserting itself with its sixth board in eight days.

Industry analyses by Huaxin Securities cited the ongoing growth of high-speed copper cable sales, driven by applications in server connectivity and decoupled switching and routing. Predictions suggest a robust 25% compound annual growth rate from 2023 to 2027, projecting shipments to reach 20 million by 2027.

Additionally, a report from CITIC Securities highlighted plans for invigorating long-term funding into the capital market. A news conference held by five regulatory bodies emphasized initiatives for high-quality market development, with the potential for new funding scales reaching trillions if strategic objectives are realized.

While Great Wall Securities commented on the pivotal implementation of policies aimed at reforming financial fields and enhancing market health, they identified potential for significant growth in long-term investments from various funds, such as public, insurance, social security, and pension. The comprehensive approach includes scaling up investments, refining assessments, and fortifying market ecosystems to sustainably boost the injection of long-term capital into the A-shares.

Key Insights Table