A-share Evening Highlights | Pan Gongsheng: Safeguard the stable operation of financial markets including stocks, bonds, and foreign exchange

Evening Highlights 1. PBOC raises foreign exchange deposit reserve ratio to 6%, effective November 15 Importance: On November 3, the People's Bank of China issued an announcement stating that, in order to strengthen foreign exchange liquidity management of financial institutions, it has decided to raise the foreign exchange deposit reserve ratio for financial institutions by 2 percentage points, from the current 4% to 6%, effective November 15, 2026. According to Wen Bin, Chief Economist of China Minsheng Banking Corp., Ltd., the recent continued strengthening of the renminbi means the increase in the foreign exchange deposit reserve ratio will tighten domestic US dollar liquidity and ease upward pressure on the renminbi; in 2021, the PBOC raised this tool twice to 9%, and between 2022 and 2023 it cut it three times to the current 4%. Lian Ping, Chairman of the China Chief Economist Forum and Dean of the International Institute of Finance, said this increase is a macroprudential adjustment by the PBOC to one-sided exchange rate fluctuations and foreign exchange liquidity against the backdrop of a relatively strong renminbi and ample foreign exchange supply, with the aim of avoiding expectations of rapid one-sided appreciation and enhancing two-way flexibility in the market. 2. Pan Gongsheng: Safeguard the stable operation of financial markets including stocks, bonds, and foreign exchange Importance: According to Xinhua News Agency, the 25th session of the Standing Committee of the 14th National People's Congress held its second plenary meeting on the morning of the 3rd at the Great Hall of the People in Beijing, at which Pan Gongsheng, Governor of the People's Bank of China, was entrusted by the State Council to deliver a report on financial work. The report set out considerations for next steps: continue to implement an appropriately loose monetary policy; further strengthen and improve financial regulation; enhance the adaptability of financial services to the real economy and accelerate the building of a multi-tiered modern financial market system; steadily deepen financial reform and high-quality opening-up; implement monetary policy tools that support the capital market, consolidate and improve the capital market stabilization mechanism, safeguard the stable operation of financial markets including stocks, bonds, and foreign exchange, and hold the bottom line of preventing systemic financial risks. 3. PBOC conducts RMB100 billion swap facility operation, winning bid rate 10bp Importance: On November 3, the People's Bank of China conducted a Securities, Funds and Insurance companies Swap Facility (SFISF) operation. The operation amount was RMB100 billion, using a rate-based tender method, with 31 securities and fund companies participating in bidding and a winning bid rate of 10bp. The PBOC also published the announcement of the results of the Securities, Funds and Insurance companies Swap Facility operation [2026] No. 1 on the same day. According to The Paper, China Securities Co., Ltd. said it had declared the third batch of swap facility operations and participated in bidding; Guolian Minsheng Securities said it had won a bid again; GF SEC said it had won bids for three consecutive batches since first participating in the initial batch in October 2024. 4. Iran comments on negotiations, international crude oil futures plunge intraday Importance: On the evening of November 3, international crude oil futures plunged intraday. At 20:27, Brent crude oil futures fell below US$105/barrel to US$104.99/barrel; at 21:33, the decline widened to 2% to US$102.19/barrel, while WTI crude oil futures stood at US$94.46/barrel at the same time. As of 22:30, WTI crude oil futures were at US$96.22/barrel and Brent crude oil futures at US$104.36/barrel. On the news front, according to CCTV News, an official familiar with the negotiations said Qatari mediators are expected to receive feedback from the United States and Iran on a new proposal within the next 36 hours. According to a report cited by Wallstreetcn, the Iranian president said Iran's Supreme Leader has granted "additional authorization" allowing dialogue on issues previously regarded as "non-negotiable." 5. World Gold Council: Global central banks net bought 321 tonnes of gold in Q3, gold ETF holdings hit record high Importance: The World Gold Council released its Q3 2026 Gold Demand Trends report on November 3. The report showed that global central banks net bought 321 tonnes of gold in Q3, the fastest pace of purchases since the end of 2024; cumulative purchases so far this year totaled 675 tonnes, slightly above the level in the same period last year. During the same period, global physically backed gold ETFs saw net inflows of 211 tonnes, reversing the outflows in Q2, with total holdings rising to 4,256 tonnes, a record high; over-the-counter transactions and other gold demand totaled 143 tonnes, above 101 tonnes in the same period last year. 6. US midterm elections begin voting Importance: According to Xinhua News Agency, the United States began voting in the midterm elections on the 3rd. At 6 a.m. US Eastern Time (19:00 Beijing Time), polling stations opened first in some eastern states including Maine, New York, and Virginia. In this election, Republicans and Democrats will contest all 435 seats in the House of Representatives and 35 of the 100 Senate seats, and voters will also elect governors in 36 states as well as some state legislators and other local public officials. A CMSC research report noted that, based on the latest polls from eight institutions, Republicans have the highest probability of losing both the Senate and the House, a medium-to-low probability of retaining the Senate but losing the House, and the lowest probability of holding both chambers. Opportunity Outlook GMTEight sorts through the sectors with the highest attention on the day and their catalyst events. 1. Electronic cloth: According to Sublime China Information's November quotes, mainstream 7628 thick cloth is quoted at RMB14.6/meter to RMB14.65/meter, up RMB1.5/meter month-on-month; 2116 thin cloth is quoted at RMB20.2/meter, up RMB2.5/meter month-on-month. 2. Memory: Sharetronic Data Technology said in its investor relations activity record that DDR is in severe shortage, and recent quotes have been raised by 30% and accepted. 3. Long-duration energy storage: Contemporary Amperex Technology delivered the first 5.64MWh EnerQB long-duration energy storage system to Quinbrook for a 3GW/24GWh series of projects in Australia. 4. Nuclear power: Unit 2 of CGN's Zhejiang Sanao nuclear power project completed its first nuclear fuel loading, with a total of 177 nuclear fuel assemblies loaded. 5. Methanol: Geely unveiled its new-generation methanol hybrid technology, with the first model, the Galaxy Starshine 6 E-fuel, launched, with methanol cost per 100 kilometers as low as RMB20. Among these, signals of recent tight memory supply continue. According to Sharetronic Data Technology's investor relations activity record, because HBM occupies a large amount of capacity, the price increase trend for DDR will remain unchanged for at least the next three years; Flash is relatively weak and easier to expand production, and consumer Flash has already seen price cuts; HDD prices remain firm due to rigid demand for cold and warm data storage. A Guoyuan research report said tech earnings have triggered a reassessment of market expectations, and it recommends paying attention to AI profit realization and internal divergence within the memory sector. Selected Announcements Positive Announcements 1. China XD Electric: 12 subsidiaries became among the winners of State Grid's fifth 2026 substation equipment (including cables) procurement, with total winning bids of approximately RMB1.115 billion 2. Henan Pinggao Electric: The company, its subsidiaries, and joint ventures won bids in State Grid's fifth 2026 substation equipment procurement, totaling approximately RMB998 million 3. Wuliangye Yibin: Repurchased 8.4097 million shares in October, paying approximately RMB600 million 4. Ningbo Joyson Electronic Corp.: Plans to repurchase RMB150 million to RMB300 million of shares, all of which will be cancelled to reduce registered capital 5. Shandong Wit Dyne Health: Controlling shareholder plans to increase holdings by no less than 3.52 million shares and no more than 7.0386 million shares within six months starting November 4 Negative Announcements 1. Beijing Qianjing Landscape: A major subsidiary in the photovoltaic business has been temporarily suspended from production since September 8; if production is not resumed before December 7, the stock faces the risk of being subject to other risk warnings 2. Wingtech Technology: Nexperia B.V. has sued the company and its actual controller in the Amsterdam District Court of the Netherlands, claiming US$2 billion in damages 3. Hangzhou Lion Microelectronics: Persons acting in concert with the controlling shareholder collectively reduced holdings by 7.7 million shares from August 3 to November 2, with their combined shareholding ratio falling from 22.58% to 21.58% 4. Chongqing Afari Technology: October vehicle sales were 6,282 units, down 25.81% year-on-year 5. Cultural Investment Holdings: Revenue for the first three quarters was RMB180 million, down 29.51% year-on-year; net loss was RMB37.5458 million Tomorrow's Focus Watch tomorrow (November 4): meeting of EU, US, and Ukrainian negotiators in Brussels, and US midterm election results gradually emerging.