Category: Fintech

Recent reports from leading international investment banks highlight renewed optimism toward Chinese equities, despite increased market volatility observed since the start of July.

The Shanghai Composite Index reached a monthly peak of 4,143.31 on July 1 but declined sharply to 3,938.88 yesterday, marking its lowest point so far this month. Similarly, the Shenzhen Component Index fell from an early high of 16,332.48 on July 1 to a low of 14,781.24 yesterday, while the Shenzhen ChiNext Index dropped from 4,361.83 to 3,812.66 over the same period.

Despite these swift declines, a major international bank upgraded Chinese stocks to an overweight stance. The firm pointed to compelling valuation levels compared to other leading global markets and emphasized the ongoing dominance of the technology sector, which it views as the primary driver of growth for mainland shares.

Another prominent bank maintains an overweight recommendation on Chinese equities. It expressed confidence in artificial intelligence-related investments and companies expanding globally, highlighting the potential for these sectors to continue fueling growth.

Insights from recent global investor roadshows suggest growing interest in Chinese stocks among international investors. A senior strategist at a major U.S. financial services company mentioned expectations of a steady flow of capital back into the market in the upcoming months.

Research from a Swiss banking firm indicates that various types of funds are poised to increase their exposure to Chinese equities, including household savings shifted into investments, margin financing, short selling, private equity funds, and exchange-traded funds. An analyst from the same bank pointed out that overseas investors are gradually re-engaging with China’s equity market.

Some foreign investors believe that the mainland stock market is increasingly demonstrating its competitiveness in the hard technology sector. One investment strategist noted that while Hong Kong equities outperformed mainland stocks last year, the situation has reversed in 2023, driven primarily by China’s strengths in advanced technology fields.

Artificial intelligence remains the most prominent investment theme among global institutions. A major international bank expects AI to continue leading market interest, with the technological sector driving overall growth. The bank predicts that the industry’s earnings cycle is nearing its bottom and will begin to rebound.

Financial projections suggest that the net profit growth rate for non-financial listed companies in China will be around 10 percent this year. The AI industry chain, however, is expected to see growth rates of 71 percent in 2023 and 47 percent in 2024, significantly surpassing the broader market and benchmark indices like the CSI 300.

Even though the operating environment across China’s banking sector has yet to show significant improvement, Fitch Ratings, based in the United States, has upgraded five Chinese joint-stock commercial banks. The agency cited government policy support and a declining risk appetite among these lenders as key reasons for the upgrades.

Fitch has raised the long-term foreign-currency issuer default ratings for Industrial Bank and Shanghai Pudong Development Bank, along with their viability ratings, as well as those of China Merchants Bank, China Everbright Bank, and Citic Bank, announced on July 3.

Since the end of last year, Fitch has increased the long-term foreign-currency ratings for three Chinese joint-stock banks and the viability ratings for six such institutions. The agency’s reports consistently emphasize several critical factors driving these ratings upward, including a diminished risk appetite, easing asset quality pressures, and stabilizing or improving profitability. This reflects recognition of the banks’ progress in enhancing asset quality, strengthening capital levels, and transforming their business models.

The decision to upgrade several Chinese joint-stock banks occurred despite regulatory indicators in the first quarter showing that the domestic banking industry remains in a state characterized by rising sales but declining profits, according to Dong Ximiao, chief economist at CMB-China Unicom Consumer Finance and deputy director of the Shanghai Finance and Development Laboratory.

Experts note that rating agencies tend to focus on evolving underlying trends rather than isolated financial metrics at a specific point in time.

The upgrades highlight Chinese banks’ ability to shift strategically away from heavy reliance on net interest margins toward more capital-efficient business models and diversified revenue streams, Dong explained. While profitability continues to face pressure, they have made notable progress in actively optimizing their balance sheets and addressing legacy risks.

Although completely returning to the high-growth phase of the past seems unlikely, the industry is still trending toward steady development. After absorbing historical challenges and strengthening their safety buffers through provisions, the overall quality of growth is expected to improve.

While the sector may not replicate its earlier rapid expansion, it is anticipated to follow a stable long-term trajectory. Confronted with past issues and reinforced buffers, the potential for high-quality development is on the rise.

Leading institutions will strengthen their competitive advantage through enhanced risk management and transformation strategies, while smaller and mid-sized banks are expected to grow soundly by leveraging low-cost core liabilities, fee-based income, and prudent asset-risk management practices.

China’s foreign exchange reserves decreased in June, influenced by the appreciation of the US dollar, which impacted the valuation of dollar-denominated holdings. Despite this, the country’s reserves remained above the adequate threshold of $3.4 trillion for the third consecutive month, totaling $3.42 trillion as of June 30, down $26 billion from the previous month. During the first half of the year, reserves increased by $58.4 billion.

The primary reason for the June decline was the faster rise of the US Dollar Index compared to global financial asset prices, leading to a reduction in the total valuation of foreign reserves held in US dollars, according to financial analysts.

Supported by robust exports, China’s foreign exchange reserves continue to enjoy stability. Experts highlight that ongoing global demand for artificial intelligence and energy-related goods help sustain Chinese export growth. Additionally, China’s efforts to diversify its foreign trade markets provide a buffer against economic risks associated with reliance on a single economy.

China is also implementing more open financial policies to facilitate cross-border capital movement. For example, Shanghai is set to explore offshore yuan trading, making it easier for international institutions to acquire yuan assets, as announced by senior officials.

On the gold front, the country’s holdings saw an accelerated pace of growth amid a significant drop in international gold prices last month. The central bank continued its buying spree for the fourth consecutive month, expanding its gold reserves by 480,000 ounces to reach 75.44 million ounces by the end of June. Monthly increases included 40,000 ounces in January, 30,000 in February, 160,000 in March, 260,000 in April, and 320,000 in May.

The decline in gold prices in June—a 12 percent drop driven largely by expectations of Federal Reserve interest rate hikes—appears to have prompted increased gold purchases by the central bank. According to analysts, China’s gold reserves constitute about 9 percent of its total official reserve assets, which is lower than the approximately 27 percent held by central banks globally. This indicates substantial room for future growth in gold holdings.

The insurance market in the country is projected to be the fastest-growing in the world over the next decade, with an average annual growth rate of 7.3%. The country’s life insurance sector is anticipated to grow even more rapidly, at an estimated 7.6% annually, according to a recent report from a major global financial services firm’s Chinese insurance division.

Global insurance premiums increased by 7.1% last year compared to the previous year, reaching approximately 6.9 trillion euros (around 7.9 trillion USD). The country’s insurance industry experienced consistent growth of 7.4%, with total premiums hitting about 745.6 billion euros (roughly 852.4 billion USD), solidifying its status as the second-largest insurance market worldwide.

The life insurance segment in this country outpaced the broader Asian market during 2025. While overall Asian life insurance premiums grew by 9.9%, the country’s life insurance market surged by 11.4%, firmly establishing its leadership in the region.

Industry experts attribute this growth to increasing demand for retirement income protection as the population ages, heightened awareness of supplementary pension insurance, and steady household wealth expansion driving a desire for more diverse financial planning options.

One analyst highlighted that demand in the country’s life insurance market remains robust, noting that the decline in guaranteed interest rates and the shift toward participating insurance products are expected to enhance insurers’ liability management and alleviate pressures from negative investment spreads.

The penetration rate of life insurance, calculated as premium income as a percentage of gross domestic product, stands at 2.5%. This figure is nearing North America’s rate of 2.8% and indicates that the market is maturing. As the country’s pension system continues to adapt to rapid demographic shifts, life insurance is poised to become an increasingly vital component of supplementary retirement security.

Lithium carbonate futures and options listed on the Guangzhou Futures Exchange (GFEX), the only Chinese exchange offering contracts for this essential battery material, have now been made accessible to all international investors as of today. These are the first contracts on the GFEX to be available through the designated domestic product mechanism, allowing foreign investors to participate directly in trading, according to a GFEX representative. Previously, the exchange had only allowed qualified foreign investors (QFIs) to trade in futures and options for industrial silicon, lithium carbonate, and polysilicon, starting in March of last year.

This move broadens access beyond the QFI scheme, which previously required foreign investors to seek approval from China’s securities regulators and hold related assets with domestic institutions. The expanded access is expected to enable international companies involved across the lithium supply chain to hedge against price fluctuations in production and sales directly within China’s market, reducing dependence on less-liquid overseas contracts.

As of May’s end, China listed nearly 170 futures and options products, including 35 designated domestic products open to global investors and 115 available exclusively to QFIs. This means that approximately 70% of all these products are now reachable to foreign investors through these two channels.

Once the new opening is implemented, foreign upstream and downstream firms will be able to trade directly to hedge against price changes in their operations, removing the need to rely on niche overseas markets, explained Wang Xiaoguo, general manager of Citic Futures.

With the ongoing development of renewable energy technologies, demand for lithium carbonate as a critical raw material is steadily increasing. Major lithium battery traders in Japan and South Korea are closely observing the internationalization of lithium carbonate futures, Wang noted.

Lithium resource projects typically involve long development timelines and significant investments. Given the market’s price volatility, these contracts can assist industry players in locking in future revenue, stabilizing returns on investments, and ensuring a more secure global lithium supply, the GFEX representative added.

Launched in July 2023, lithium carbonate futures and options on the GFEX have demonstrated strong liquidity, with an average daily transaction value reaching approximately 25.8 billion yuan (about 3.8 billion USD) as of June, providing substantial risk management opportunities for businesses.

Total new quotas approved for Chinese financial institutions to invest in offshore securities increased nearly 80% in the first half of the year compared to the same period last year. This rise reflects ongoing efforts to open the capital account, stable foreign exchange reserves, and rising demand from both institutional and retail investors for global asset allocation.

As of June 30, total approved quotas under the Qualified Domestic Institutional Investor (QDII) program reached $176.169 billion, marking a $5.3 billion increase from the end of June last year. Notably, no new quotas were granted in the second half of the previous year.

China’s foreign exchange reserves have remained steady at around $3.4 trillion, providing a strong foundation for expanding quotas. Meanwhile, a crackdown on unauthorized cross-border securities activities has shifted more investors toward approved channels, further increasing the demand for higher quota allocations.

The main driver of this increase has been the stability of forex reserves combined with growing interest in asset diversification among residents, according to Tian Lihui, dean of Nankai University’s Finance and Development Institute.

Specifically, 17 insurance companies received a total of $1.32 billion in new quotas. Of these, 15 insurers were allocated an additional $80 million each, while two received an extra $60 million each.

“Over the past two years, several insurers have requested larger overseas investment quotas from regulators, and some are in the process of applying for QDII qualification,” said Liao Bo, chief macroeconomic analyst at Northeast Securities. Since the program’s launch in 2004, the use of quotas has gone through various phases. Limited quotas have sometimes become a temporary restriction on offshore diversification. Currently, US Treasury bonds, Hong Kong equities, and US stocks are among the most actively pursued assets. It’s expected that insurer quotas will likely see further increases in the future, Liao added.

Data from Wind Information shows that by the end of the first quarter, offshore holdings of QDII assets were heavily concentrated. Hong Kong and the US accounted for over 90% of the total market value of offshore investments. Holdings in Hong Kong amounted to CNY316.1 billion (approximately $46.6 billion), or 51%, while US investments reached CNY246.6 billion (about $36.3 billion), roughly 40%.

Liao predicts China’s economy will continue a gradual recovery, leading to stabilization and eventual rebound in corporate earnings. With US Treasury yields remaining relatively high, insurers are expected to become more active in utilizing their QDII quotas to diversify into Asia-Pacific markets.

Among the promising sectors, Liao highlighted Hong Kong-listed internet companies as a key area for growth, noting their ongoing expansion across value chains. Advances in artificial intelligence and other emerging technologies are ushering in a new Kondratieff Wave, bolstering core technology businesses and creating new high-value commercial opportunities, he emphasized.

London spot gold closed nearly 30% below its all-time high of $5,598 per ounce, reached at the beginning of the year, marking the end of the first half of 2023. Analysts are evenly split on the metal’s future, with some predicting prices will stay within a broad range during the second half, while others foresee a modest rebound.

Yesterday, gold prices fell 1.8%, closing at approximately $4,017 per ounce, with a brief dip below $3,950 per ounce—the first time since early November 2022. From an investment flow perspective, recent declines reflect a clear divergence in investor behavior.

Short-term investors have been reducing their gold holdings. Data from the World Gold Council shows global physically-backed gold ETFs experienced net outflows of around $2 billion in May. Overall ETF assets declined 2% from the previous month to $604 billion, and total gold holdings decreased slightly by 0.4% to 4,121 tons.

Conversely, long-term demand, especially from central banks, continues to lend support to gold prices. A recent survey indicated that 45% of the 74 central banks polled plan to increase their gold reserves over the next 12 months—the highest percentage since the survey began. Additionally, 89% of reserve managers anticipate a global rise in central bank gold holdings over the upcoming year.

The recent dip below $4,000 per ounce resulted from multiple adverse factors, including shifts in petro-dollar narratives, a reversal in Federal Reserve interest rate expectations, ongoing ETF outflows, and a decline in gold’s status as a safe haven, noted Wang Weimang, an investment manager at Zhonghui Futures. These developments suggest a structural change in the market’s underlying dynamics.

Looking forward, China International Capital Corporation remains optimistic about gold’s prospects. The firm’s research suggests that, as geopolitical tensions and inflation pressures ease in the second half, further interest rate hikes by the Fed are unlikely. Instead, the timing and scale of rate cuts may surpass market expectations, boosting dollar liquidity and supporting assets like gold and equities.

However, major financial institutions are divided on gold’s outlook. Goldman Sachs, JPMorgan Chase, Citigroup, and Morgan Stanley have all lowered their average price forecasts for 2023. Conversely, other firms remain bullish; for instance, the Bank of Montreal, in its third-quarter commodities outlook, cut its second-half forecast by 5% to $4,625 per ounce but still expects gold to surpass $5,000 per ounce in the first quarter of 2027.

Recent Federal Reserve communications prompted significant adjustments in market positioning. While near-term volatility is expected, gold is likely to benefit from ongoing de-dollarization trends. As macroeconomic uncertainties settle, the sector could regain momentum.

For the third quarter, investors are advised to closely watch US economic indicators and Federal Reserve policies. According to Wang Xiang of Bosera Funds, the market’s expectations for further substantial rate hikes this year appear overly pessimistic. Current liquidity signals suggest room for a medium-term rebound in gold prices. Overall, gold prices are expected to continue fluctuating significantly in the coming months.

Nearly 200 companies from Shanghai were listed in Hong Kong by the end of last year, highlighting the city’s increasing importance as a global platform for mainland high-tech firms seeking international growth, according to Hong Kong’s commerce leader.

“Hong Kong serves as a vital gateway for Shanghai to connect with international markets and as a key platform for local enterprises to access global capital and expand worldwide networks,” said Algernon Yau. He made these remarks during a recent session in Shanghai focused on overseas expansion for innovation and technology companies.

As a major connector and value generator, Hong Kong can help mainland innovative tech firms efficiently link to international markets, attract global investors, and grow their overseas business opportunities, he added.

Dedicated Support for International Growth

Yau mentioned that last year, the Hong Kong government set up a Task Force for Supporting Mainland Enterprises Going Global, uniting various government departments including Invest Hong Kong and the Hong Kong Trade Development Council, to assist mainland companies in expanding overseas through Hong Kong.

He encouraged mainland firms interested in global expansion—especially high-potential innovation and tech companies—to establish a presence in Hong Kong. The task force has launched an online platform offering professional services in eight key areas such as legal, accounting, finance, marketing, and testing and certification. It also helps companies find suitable international partners.

Additionally, Yau noted that the task force is organizing overseas study tours to provide participating companies with direct insights into the business environments and growth opportunities in their target markets.

Industry Applauds Practical Assistance

Rong Guoqiang, general manager of an innovation incubator specializing in humanoid robots in Shanghai, praised the government’s latest initiative, saying it addresses a significant challenge faced by many tech startups.

He explained that while management teams at innovation and technology firms, especially hardware startups, are typically strong in technical skills, they often lack familiarity with international legal systems, taxation, intellectual property, talent recruitment, financing, and overseas sales channels.

Rong believes Hong Kong’s effort directly meets the practical needs of mainland companies looking to go global. “Support services like these are very important and provide real tangible help to these businesses,” he stated.

Data from Invest Hong Kong shows that since January, the agency has helped more than 410 overseas and mainland companies establish or expand their operations in Hong Kong. Of these, 60% are mainland firms, and over 20% are innovation and technology companies.

The Chinese currency has pulled back from its peak earlier this year following a rally in the US dollar triggered by unexpectedly hawkish signals from the Federal Reserve. However, analysts remain confident that the country’s economic fundamentals support the currency over the medium and long term. They anticipate that trading will continue to exhibit significant fluctuations in both directions throughout the remainder of the year.

This recent decline followed a sharp increase in the US dollar index after the Federal Open Market Committee indicated a more aggressive stance than markets had initially expected. Despite the recent depreciation, experts believe that China’s strong export performance and other economic fundamentals will continue to bolster the yuan over time, even though exchange rate movements are expected to vary from quarter to quarter.

On June 25, the US dollar index rose to 101.5 before retreating slightly to 101.36 the next day. The onshore yuan closed at approximately 6.7978 per dollar on June 26, having earlier hit its strongest level of 6.7547 on June 17. Meanwhile, the offshore yuan ended the day at around 6.8048, compared with its peak of 6.7529 earlier in June.

Looking forward, analysts believe the yuan will stay relatively resilient despite bouts of increased volatility. The main catalyst for the shift from appreciation to depreciation was the Federal Reserve’s unexpectedly hawkish stance at its recent policy meeting. The Federal Reserve’s economic projections raised the median forecast for the federal funds rate in 2026 to 3.8 percent, up from 3.4 percent projected in March.

According to a leading macro analyst, the statement from Federal Reserve Chair Kevin Warsh at the June 16 meeting conveyed a more hawkish outlook than the markets had anticipated. This had a greater impact on the dollar than the temporary safe-haven demand created by the US-Iran memorandum of understanding on June 15, which saw the dollar index rise from 100.4 on June 17 to 101.5 by June 25.

Short-term, the yuan is expected to stay relatively strong. Factors such as the US-Iran agreement and the gradual reopening of shipping routes through the Strait of Hormuz are likely to ease inflation pressures and reduce the need for additional Federal Reserve rate hikes, limiting further dollar gains. Additionally, China’s exports are forecasted to sustain solid growth, providing further support for the yuan.

Export Performance Continues to Bolster the Yuan

Some experts dismiss the idea that the yuan’s appreciation cycle has come to an end. Since mid-2025, both the yuan and the dollar have been strengthening simultaneously, with the yuan continuing to appreciate despite the dollar’s rebound. Higher US interest rates do not inevitably lead to a significantly stronger dollar, especially as policy uncertainties surrounding US leadership weigh on the greenback. Meanwhile, China’s economic recovery remains in its early phases, with recent setbacks largely driven by temporary disruptions.

A futures firm noted that the yuan’s appreciation has not merely tracked the movements of the dollar index. Even when the dollar strengthened again in May, the yuan kept appreciating, supported by China’s consistently better-than-expected export numbers.

However, some market participants are concerned about the decline in the foreign-exchange settlement ratio for exports, which fell to 60 percent in April and May from 68 percent in the first quarter. This ratio indicates how much of exporters’ earnings are converted into yuan and has sparked questions regarding whether the yuan’s recent appreciation has already peaked. It’s important to note that this ratio measures the share of foreign-exchange settlements relative to total overseas earnings, not the total amount.

Experts explain that a lower settlement ratio doesn’t necessarily mean export incomes have decreased. Banks’ foreign-exchange settlement figures represent actual receipts, which tend to lag behind export and shipment data by approximately 30 to 90 days. Since April and May saw export earnings hit new highs this year, the delayed settlement of exports is expected to continue supporting the yuan. Despite the decline in settlement ratio, the total foreign-exchange settlements have remained broadly stable, providing critical backing for the currency’s strength in June.

The funds raised through new listings in mainland China and Hong Kong during the first half of the year represent approximately 22% of the global total, with about one-third of all listings occurring within the country, according to a recent industry report.

Worldwide, initial public offerings (IPOs), secondary listings, and dual-primary listings generated a combined total of $191.1 billion from January to June, marking a 208% increase compared to the same period last year. Notably, China’s mainland and Hong Kong markets contributed $42.3 billion of this sum, nearly doubling their share year-over-year.

The Nasdaq emerged as the leading stock exchange for new listings, raising $113.1 billion, primarily boosted by SpaceX’s $85.7 billion IPO. The Hong Kong Stock Exchange ranked second with $26.8 billion, reaching a five-year high. Meanwhile, the Shanghai Stock Exchange and the STAR Market in Shanghai ranked fourth and sixth, respectively, with $9.4 billion and $4.4 billion raised.

Growth on China’s mainland was driven mainly by strong performances in the Shenzhen and Shanghai STAR Market, particularly in technology and advanced manufacturing sectors. However, the main board of the Shanghai Stock Exchange underperformed due to a shift in investor risk appetite away from traditional industries toward emerging sectors.

Remarkably, no newly listed stocks on Chinese exchanges experienced declines upon debut in the first half of the year, with an average first-day return rate of 233%, the highest in five years.

Companies listed in mainland China played a key role in the Hong Kong stock market’s new listings, accounting for 96% of the number and 99% of the value of all IPOs on the Hong Kong exchange during this period.

The Hong Kong exchange has notably improved its appeal by streamlining its listing process, introducing a fast-track system called ‘Mainland + Hong Kong,’ and creating a dedicated channel for technology firms. These initiatives offer more convenience and flexible options for high-quality companies aiming to list in Hong Kong.

Looking ahead, it’s expected that innovative technology companies—especially those working in artificial intelligence, humanoid robots, advanced semiconductors, new energy storage, and cutting-edge biopharmaceuticals—will continue to lead new listings in mainland China during the second half of the year.

Additionally, the Hong Kong market is forecasted to stay active, supported by ongoing regulatory improvements, a healthy pipeline of IPOs, and the increasing trend of dual listings in Hong Kong and mainland China.

Chinese and international experts convened to discuss the progress of the Chinese yuan’s internationalization during a sub-forum held at the annual Summer Davos forum. The session focused on recent advances in yuan internationalization, the currency’s rising value, and strategies for Shanghai and Hong Kong—two of China’s major financial centers—to collaborate and boost the country’s financial market openness.

China continues to develop offshore yuan hubs, expanding financial institutions and product offerings to facilitate wider use of the currency abroad, noted Zhu Ning, a finance professor at a prominent Shanghai-based university. He emphasized that China’s resilient economy fuels global market confidence in holding yuan, supported by ongoing currency swap arrangements and increasing cross-border trade and investment needs.

The international growth of the yuan is driven by a variety of approaches rather than a single strategy, according to South Africa’s deputy finance minister. He highlighted that China and South Africa are deepening cross-border financial cooperation by balancing transparency with interoperability.

While the yuan’s internationalization is progressing steadily, Liu Zongyuan, a senior researcher specializing in China at a US-based think tank, pointed out that the development of its core functions remains uneven, with significant potential for further improvement. The currency’s cross-border settlement capability is becoming more mature, aiding the internationalization process, yet currency pricing functions still lag behind, leaving room for growth.

As global commodity markets gradually transition away from reliance on a single reserve currency, Liu sees enormous potential for the yuan in pricing and trading commodities.

Support for the yuan’s recent appreciation stems from solid economic fundamentals, Zhu indicated, citing China’s resilient outlook, consistent trade surplus, and improving macroeconomic environment. However, he cautioned against expecting rapid short-term gains, noting that swift appreciation could pose risks, particularly by undermining export competitiveness and dampening economic growth, since exports are major drivers of China’s economy.

On the strategic rivalry between Shanghai and Hong Kong, Zhu clarified that Shanghai mainly concentrates on the domestic financial market, real economy, onshore assets, and exchange rate activities, aiming to establish itself as a hub for domestic asset and wealth management that links to global markets. Meanwhile, Hong Kong remains a leading offshore yuan trading center, a position expected to stay stable in the long term.

Since early June, shareholders in seven Chinese semiconductor companies listed on Shanghai’s Nasdaq-style Star Market, including Biwin Storage Technology and VeriSilicon Microelectronics (Shanghai), have sold over CNY6.7 billion (approximately USD989 million) worth of shares. This wave of profit-taking follows recent substantial increases in share prices across the sector, according to preliminary data.

The largest share sale was by a major stakeholder in National Silicon Industry Group, who cashed out CNY2.6 billion (around USD384 million). VeriSilicon sold CNY1.6 billion worth, and Biwin Storage offloaded CNY1.4 billion. Collectively, these three companies’ shareholders realized around CNY5.6 billion (roughly USD827 million), accounting for more than 80% of the total disclosed share reductions among the seven firms.

Additionally, several firms, including Shanghai-based ACM Research, a subsidiary of a US chip equipment manufacturer, and Guangdong Cellwise Microelectronics, announced plans to reduce their shareholdings this month. ACM Research’s Shanghai branch was notably active, with seven senior executives planning to sell portions of their stakes as the company’s stock surged to record highs.

Since May, segments such as AI computing infrastructure, semiconductor equipment, and memory chips have seen significant gains. Many semiconductor stocks have doubled or even tripled in value, leading to sizable unrealized gains for investors. Participants in the sell-offs include industry-focused funds like the National Integrated Circuit Industry Investment Fund (commonly known as Big Fund 1), venture capital firms, and company executives—all portfolio holders offsetting their profits.

The national semiconductor fund sold 99.1 million shares of National Silicon Industry between May 6 and June 4, representing a 3% stake and netting CNY2.6 billion (USD384 million). This sale marked the maximum allowed reduction, reducing its ownership from 15.49% to 12.49%, yet it remains a key stakeholder.

Furthermore, ACM Research’s Shanghai subsidiary, whose stock price has nearly increased 2.5 times since May, announced that seven senior executives, including CEO and chairman Wang Hui, plan to sell up to 759,600 shares from June 26 to September 24 through centralized bidding. This amounts to approximately 0.1575% of the company’s total shares. At the latest closing price of CNY378.75 (USD55.80) per share, the total value of this planned sale is roughly CNY288 million (USD42.5 million).

The London Metal Exchange is set to introduce the LME Steel Hot Rolled Coil Shanghai contract this October, with settlement prices based on the HRC futures from the Shanghai Futures Exchange. This development will allow global investors to directly reference and incorporate Chinese price benchmarks into their investment, trading, and risk management strategies.

At the Lujiazui Forum yesterday, the Shanghai Futures Exchange reached an agreement with the London Metal Exchange to license its HRC futures settlement price. The plan is to support the launch of futures contracts that use this price as a benchmark, marking a significant step in internationalizing China’s steel pricing system.

The HRC futures contracts on the Shanghai exchange have ranked as the world’s largest in terms of trading volume among plate futures, averaging around 700,000 lots daily, with an open interest of approximately 1.9 million lots. Over time, these futures have established themselves as a key price reference for Chinese steel plate imports across Asia-Pacific, the Middle East, North Africa, South America, and other regions.

This partnership aims to broaden the application of the “Shanghai price” globally, engaging steel companies and financial institutions worldwide in the process of price discovery. It also seeks to enhance the international influence of China’s steel futures markets. Tian Xiangyang, chairperson of the Shanghai Futures Exchange, emphasized that this cooperation would promote the opening of China’s capital markets and contribute to developing a leading global futures exchange.

The agreement will make it easier for companies outside China to access one of the world’s most liquid commodity contracts while maintaining the convenience of trading the LME’s cash-settled steel contracts, explained John Williamson, chairman of the London futures and forwards exchange. Additionally, this collaboration will help complete the LME’s lineup of cash-settled steel contracts and strengthen ties with China, the world’s largest producer and consumer of hot rolled coil.

Tian highlighted that China, as the top producer and consumer of HRC, produced 325 million metric tons last year—representing 22% of the country’s steel output—making it the leading global producer. China’s steel exports also reached more than 21.52 million metric tons, accounting for roughly 20% of its total steel exports.

The Shanghai Futures Exchange plans to deepen cooperation with international institutions, exploring diverse approaches to market opening and further maximizing the role of futures trading in global markets.