Hong Kong stock concept tracking | Fiscal and monetary policies support the economy. Institutions are bullish on the short-term value space of the banking sector with strong certainty (including concept stocks).

On January 14th, the central bank responded to market concerns at a press conference held by the State Council Information Office. A macroeconomic research report from Guangfa Bank pointed out several details to pay attention to: when addressing the issue of government bond yields, the central bank cited the upward trend in long-term interest rates by the end of 2022 and the incident involving Silicon Valley Bank in 2023, continuing to warn of risks; in response to interest rate policy, the central bank emphasized the need to "expand the policy space for comprehensive measures", focusing on self-regulation of deposit rates, maintaining market order, balancing domestic and foreign factors, and accelerating the supplementation of bank capital. From these statements, it is clear that interest rate policy cannot be simply understood as a one-way interest rate cut. In response to the "Five Major Articles", the central bank stated that it will "strengthen positive incentives, leverage the role of structural monetary policy tools and macroprudential policies to guide financial institutions to increase credit resources and optimize credit structure", highlighting the need to increase credit resources before optimizing credit structure. In January 2025, Goldman Sachs raised the stock ratings of several Chinese banks. CITIC Securities research report stated that based on the latest statements from the central bank, it has set a positive tone in its policy expressions for financial support for high-quality economic development. However, the implementation of incremental monetary policy measures still depends on the central bank's judicious decisions based on the domestic economic situation, exchange rate trends, bond market dynamics, etc. Currently, the central bank highly values the soundness of bank operations and interest margin pressure, with the balance sheet pricing of bank assets and liabilities being one of the important considerations for future related policies. Banking stocks have remained stable since the beginning of 2025, outperforming the dividend sector. The core reason for this is the relatively strong value space of the underlying stocks corresponding to banking stocks. In the context of re-evaluating credit risk assets in the banking sector, CITIC Securities assumes that the economy will not enter an extremely pessimistic scenario, and the continued interpretation of the "better-than-trading valuation-implied expectations" reality, combined with the positive impact of institutional allocation behaviors such as insurance, passive and active management, it is expected that banking stocks will continue to show strong returns in the first half of 2025. Related Hong Kong stocks in the banking sector: Agricultural Bank Of China (01288), Industrial and Commercial Bank of China (01398), China Construction Bank (00939), Bank Of China (03988), China Merchants Bank (03968), Postal Savings Bank Of China (01658), CITIC BANK (00998), etc.