Huachuang Securities: "One line, one bureau, one meeting" will play a combination of punches to strengthen market risk preferences.

The State Council Information Office held a press conference at 9:00 a.m. on May 7, 2025, inviting the heads of the People's Bank of China, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission to introduce the "package of financial policies to support market stability and expectations," and answer questions from reporters. In response, Yao Pei, chief analyst at Huachuan Securities, said that the content of this meeting can be divided into two main parts: support for the real economy and support for the capital market. Support for the real economy includes both quantity and structural aspects. In terms of quantity, there will be reductions in reserve requirements and interest rates. In terms of structure, the People's Bank of China will have greater flexibility and guidance in directing funds, with a current focus on technology innovation and expanding domestic demand. Support for the capital market primarily involves further strengthening the entry of "stabilization funds" and medium- to long-term funds into the market. Yao Pei believes that with a coordinated effort from various government departments, subsequent press conferences may lead to an accelerated implementation of a "package" of policies. For the stock market, stability in short-term risk preferences is more important than fundamental repair at the moment. It is not necessary to be pessimistic now, as volume is more important than price. Over the past 10 trading days, the average daily turnover of A-shares has been 1.1 trillion yuan. If the market continues to see high volume in the next one to two weeks, it will establish a more solid foundation, strengthen risk preferences, and boost confidence in an upward rebound.