August 27th Macroeconomic Index: Hong Kong Stocks Accelerate Liquidation, Insurance Capital Flows into Equity Investment

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Domestic News

1. Hong Kong stocks have accelerated their liquidation due to stricter supervision. And 32 companies have been delisted during the year

2. Economic Daily: Strictly prevent virtual assets from becoming a money laundering tool

3. Attract more medium and long-term funds into the market, and the institutional arrangements will be optimized

4. New trends in alternative investment: insurance capital has accelerated its inflow into the equity investment market

5. The continuation of MLF shrinkage parity, market participants expect that the Required Reserve Rate and interest rate cuts are still in the policy toolbox

 International News

1. The Bolivarian Alliance for the Americas held a head summit to support the results of the presidential election in Venezuela

2. United States a curfew was declared in Massachusetts towns due to the emergence of cases of Oriental equine encephalitis

3. A dam collapsed in eastern Sudan, killing 60 people and leaving hundreds missing

4. Zelensky said that Ukraine is preparing a response to the Russian attack

5. Fed Daly: The time to cut interest rates has come

Domestic News

1. Hong Kong stocks have accelerated their liquidation due to stricter supervision. And 32 companies have been delisted during the year

According to Wind statistics, as of August 26, 32 Hong Kong stock companies have completed delisting during the year, of which 10 have been privatized, 1 has been voluntarily withdrawn, 1 has been redeemed, and 20 have been cancelled from listing. In addition, a number of companies are in a state of long-term suspension and have entered a recovery period. According to data from the Hong Kong Stock Exchange, as of July 31, the number of companies suspended for 3 months or more has reached 77, and many companies have entered the countdown to the remediation period. Among the companies that have been cancelled from listing by the Hong Kong Stock Exchange, their common characteristics are small market capitalization, poor performance, "difficult creation" of annual reports, and long-term suspension of trading. (Securities Daily)

2. Economic Daily: Strictly prevent virtual assets from becoming a money laundering tool

In order to cover up and conceal money laundering, criminals continue to renovate their methods and hide money laundering activities in online transactions. Among them, virtual currency, game currency, "points platform", live broadcast reward, etc. have become new types of money laundering carriers and methods, with the characteristics of networking, chaining, etc., and are concealed and confusing. According to the latest judicial interpretations, the transfer or conversion of criminal proceeds and their proceeds through "virtual asset" transactions or financial asset exchange may be found to be "using other methods to cover up or conceal the source and nature of criminal proceeds and their proceeds" as provided for in the Criminal Law. This means that the court will severely punish money laundering crimes in accordance with the law, and intensify the crackdown on money laundering crimes such as the use of virtual currencies and game currencies.

3. Attract more medium and long-term funds into the market, and the institutional arrangements will be optimized

On August 27, the China Securities Regulatory Commission (CSRC) recently held a symposium on further deepening the reform of the capital market for institutional investors, proposing to steadily promote the optimization and improvement of key systems such as issuance and listing, trading, and delisting, and promote the construction of a policy system of "long-term money and long-term investment". Market participants believe that the relevant departments will optimize the institutional arrangements for medium and long-term funds to enter the market, break through the pain points, improve the assessment, accounting, taxation and other incentive mechanisms to encourage long-term investment, and enhance the investment value of listed companies, so as to attract more medium and long-term funds into the market and promote the formation of a virtuous circle of "long-term money and long-term investment" in the market.

4. New trends in alternative investment: insurance capital has accelerated its inflow into the equity investment market

According to incomplete statistics, since the beginning of this year, Chinese Life Group, PICC Capital, Xinhua Insurance and other insurance companies have participated in the establishment of private equity funds, including tens of billions of yuan funds. From the perspective of investment, most of the private equity funds established with the participation of insurance capital invest in key areas supported by national policies. Industry practitioners believe that insurance capital is a representative of patient capital due to its large scale and long term. Increasing equity investment, on the one hand, will help insurance funds optimize asset allocation and increase investment returns; On the other hand, it will help to provide long-term and stable financial support for high-quality enterprises and serve the development of the real economy.

5. The continuation of MLF shrinkage parity, market participants expect that the Required Reserve Rate and interest rate cuts are still in the policy toolbox

On August 27, the central bank implemented a large-scale reverse repo and medium-term lending facility (MLF) operation to cope with the increase in capital demand and the acceleration of government bond issuance at the end of the month. According to market analysts, this series of operations by the central bank not only helps to calm the volatility of the short-term capital market, but also reflects the gradual dilution of the anchor role of the MLF policy rate while maintaining reasonable and abundant liquidity. Looking ahead, with the changes in the economic situation, the market generally expects that easing policies such as interest rate cuts and RRR cuts may still be implemented in the fourth quarter to support economic growth and market stability.

International News

1. The Bolivarian Alliance for the Americas held a head summit to support the results of the presidential election in Venezuela

On the 26th, the "Bolivarian Alliance of the Americas-People's Trade Agreement" (referred to as the Bolivarian Alliance of the Americas) 11th extraordinary summit was held online, Venezuela President Maduro, Nicaragua President Ortega, Cuban President Díaz-Canel, Bolivia President Arce and other representatives of the organization attended the meeting. At the meeting, delegates expressed support for the results of this year's presidential election in Venezuela and called on all countries to stand with Venezuela and defend Venezuela's sovereignty.

2. United States a curfew was declared in Massachusetts towns due to the emergence of cases of Oriental equine encephalitis

Due to the emergence of Oriental equine encephalitis, a rare and deadly mosquito-borne disease in Massachusetts, United States, the town of Plymouth announced a curfew and closed outdoor public facilities from dusk till dawn. Meanwhile, state health officials said the towns of Douglas, Oxford, Sutton and Webster are also high-risk areas, advising people to avoid going outside during the most active hours of the night to the early hours of the morning, as well as advising local residents to use mosquito-repellent and to be mindful of clearing up standing water near their homes. Earlier, Massachusetts health officials said an 80-year-old man in the town of Oxford had been infected with the Eastern equine encephalitis virus, the first confirmed human case detected in the state since 2020.

3. A dam collapsed in eastern Sudan, killing 60 people and leaving hundreds missing

Omar·Issa·Tahir, Director of the Water Authority of the Red Sea State in eastern Sudan, issued a statement on the 26th local time, saying that the Albaat dam in the state completely collapsed on the 25th, killing 60 people and leaving hundreds missing. Located about 20 kilometers north of Port Sudan, the capital of the Red Sea State, the Albaat Dam is the main source of fresh water for Port Sudan. Affected by heavy rain for several days, the dam partially collapsed on the night of the 24th and completely collapsed on the 25th. According to local media reports, the flooding caused by the collapse of the Albaat dam inundated at least five surrounding villages. Rescue efforts were difficult as the village was completely covered by the large amount of silt carried by the floods.

4. Zelensky said that Ukraine is preparing a response to the Russian attack 

Ukraine President Volodymyr Zelensky said in a routine video speech that he discussed the situation on the front line with Syrsky, the Commander-in-Chief of the Ukrainian army. On the same day, they’re preparing to respond to Russia's attack. Zelensky said that over the past day, the Ukrainian army gained more control in the Kursk region. Syrsky also reported on the situation on the Donetsk front on the same day, saying that the Pokrovsk direction is still the most difficult, and Russia's attacks in this direction are the most intense. The Ukrainian army will strengthen the defense of positions in this direction.

5. Fed Daly: The time to cut interest rates has come

San Francisco Fed President Daly said that she believes it is appropriate for the Federal Reserve to start cutting interest rates. Daly said in an interview on Monday: "The labor market is completely balanced. The time has come to adjust the policy. This view echoes Fed Chair Jerome Powell's comments last week, who said at the Jackson Hole symposium last week that he was confident that inflation was on a path back to 2%, and that "the time has come to adjust policy." Daly stressed that the Fed must bring inflation down to its 2% target, but she and her colleagues will also work to prevent restrictive policies from harming the labor market.

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