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1. rise begets rise.

the record-breaking a-share trading volume of 2.6 trillion yuan on september 30 was a hit on all social media. this is not information sharing, but emotional connection. bullish sentiment was fully spread during the seven-day holiday, during which hong kong stocks surged, amplifying enthusiasm. the surge in the number of new account openings during the holiday season, combined with the 15% surge in the hang seng state-owned enterprises index and the hang seng technology index during the period, gives reason to believe that a-shares will rise sharply in the first week of october.

2. the potential trading capital is astronomical.

first, the savings of the household sector have increased from 60 trillion in 2016 to 145 trillion today. household savings, which have accelerated in the past six quarters, are restless in the declining interest rate (yield) environment. according to historical calculations, the excess increase in household savings in 2023-2024 will reach 9.6 trillion. roughly speaking, nearly 10 trillion residents' funds should have entered the consumption and capital markets. will they quickly return to consumption and the stock market in the next 1-2 quarters?

second, the proportion of global capital allocated to china is extremely low. according to the roughest calculation, if the global capital of us$5.3 trillion increases china's allocation by one point, the overseas capital introduced will reach us$53 billion, equivalent to 370 billion yuan.

third, the balance of a-share financing is estimated to exceed 1.5 trillion on september 30, and it is expected that in the next few days it will return to the average level of the past few years - 1.8 trillion. even in a short period of time, it will rise to near the historical high (june 2015, 2.2 trillion).

3. there should be reasonable policy expectations.

investors are focusing on fiscal policy, and there is reason to believe that fiscal spending will accelerate, expand in scope, and expand the scale of new government bonds. the focus of investors should shift from whether the scale of newly issued national debt is greater than 2 trillion to the direction of fiscal expenditure. while the scale of fiscal expansion is important, the direction of investment is even more important. if the fiscal system more directly supports residents' consumption, vigorously cuts taxes to support corporate investment, and allows funds financed by government bond interest rates to be invested in residents and corporate sectors with higher returns, it will be more able to support sustainable economic growth.

4. excitement may arouse supervisory vigilance.

the 2.6 trillion transaction has attracted some regulatory attention, and clarifying announcements such as "do not misinterpret the people's bank of china's monetary policy tools" have already given some hints. if the financing balance quickly exceeds rmb 2 trillion, the lessons of 2015 will still be fresh in our minds, and market intervention may come quietly.

5. hong kong stocks have a self-balancing mechanism.

on the one hand, rapid rises will inhibit the speed of overseas mid- and long-term capital inflows. most overseas funds are waiting for details of fiscal policy and are also worried about geopolitical risks on the eve of the u.s. election on november 5; on the other hand, the scale of short selling in the hong kong market as a percentage of total market transactions has dropped to the lowest level in 2022. hedge funds will reopen short orders at a later time and resume market-neutral strategies.

6. shanghai composite index it may quickly surge to 3700-3800 and then fluctuate. the a-share earnings ratio returned from 13.3 times on september 30 to 15.5 times - the average over the past two decades. investors then look at geopolitical relations and real estate data, the most important signals of the external environment and economic stabilization and recovery.

7. continue to be optimistic about broad consumption and technology.

the direction of fiscal expenditure is directed toward domestic demand, and chinese industries with global competitiveness are favored by investors. in addition, ipos, mergers and reorganizations that may be accelerated in the future will have an unexpected positive impact on the broad technology industry.