As of December 23rd, the daily trading volume of the A-share market has exceeded one trillion yuan for 59 consecutive trading days; The repurchase amount implemented by listed companies exceeded 160 billion yuan, setting a new historical high; The scale of equity ETFs in the A-share market has exceeded 3 trillion yuan... Behind the new changes in the market are the continuous efforts of stabilizing the stock market policies and the deepening of investment and financing reforms to reform the underlying logic of the capital market. Since the beginning of this year, the reform and development of the capital market has focused on enhancing internal stability, comprehensively deepening investment and financing reforms, and accelerating investment side construction. Since the end of September, the implementation of a package of incremental policies has accelerated, investor confidence has significantly increased, incremental funds have been actively deployed, and mergers and acquisitions have become increasingly active. Deepen the comprehensive reform of investment and financing in the capital market, break through the bottlenecks of medium and long-term funds entering the market, and enhance the inclusiveness and adaptability of the capital market system The Central Economic Work Conference has made arrangements for the reform and development of the capital market next year. The China Securities Regulatory Commission stated that the system plans to implement practical measures to highlight the key to maintaining market stability. Starting from December 15th, the personal pension system will be implemented nationwide, which is another case of promoting the two-way flow of long-term funds and capital markets. As Shen Juan, Chief Analyst of Securities at Huatai Securities Bank, said, since the beginning of this year, the capital market has experienced many milestone moments: the introduction of the new "National Nine Measures" and the implementation of new monetary policy tools... From the phenomenon to the connotation, the underlying logic of capital market operation has changed. Many institutional figures believe that this change is due to a significant increase in the importance attached by decision-makers to the stock market and the deepening of capital market reforms. The Political Bureau meeting of the Central Committee of the Communist Party of China held on April 30th emphasized the need to continue promoting the reform of small and medium-sized financial institutions into insurance, and to take multiple measures to promote the healthy development of the capital market. The Politburo meeting of the Communist Party of China Central Committee held on July 30th emphasized the need to coordinate risk prevention, strengthen supervision, promote development, boost investor confidence, and enhance the inherent stability of the capital market. The meeting of the Political Bureau of the Central Committee of the Communist Party of China held on September 26th emphasized the need to work hard to boost the capital market, vigorously guide the entry of medium and long-term funds into the market, and unblock the entry barriers for funds such as social security, insurance, and wealth management. The Politburo meeting of the Communist Party of China Central Committee held on December 9th emphasized the need to stabilize the real estate and stock markets. Since the beginning of this year, in response to investor concerns and deep-seated structural issues in the stock market, the policy "combination punch" has been timely implemented and continuously strengthened. ——Highlighting 'stability' and combining strengths and weaknesses to enhance internal stability. Strengthen targeted monitoring and supervision of margin trading, securities lending, over-the-counter derivatives, quantitative trading, etc., especially by introducing two new monetary policy tools: securities fund insurance company swap convenience and stock repurchase increase and refinancing, to promote the stabilization and recovery of the A-share market. The central government's policies have changed market expectations and greatly enhanced people's confidence. "Hua Sheng, Vice President of the China Economic System Reform Research Association and Dean of the National Development and Policy Research Institute at Southeast University, believes that the package of incremental policies introduced in late September focuses on core issues and is interrelated and coordinated. ——Focus on "investment" and comprehensively deepen the reform of investment and financing. The new "National Nine Articles" clearly state the "five musts" for high-quality development of the capital market, one of which is "to always practice the concept of finance for the people, highlight the value orientation centered on the people, more effectively protect the legitimate rights and interests of investors, especially small and medium-sized investors, and help better meet the growing wealth management needs of the people". Since the beginning of this year, relevant departments have made efforts to improve the quality of listed companies by urging them to strengthen market value management, orderly carry out cash dividends, and actively implement share buybacks. On December 17th, the State owned Assets Supervision and Administration Commission of the State Council announced the "Several Opinions on Improving and Strengthening the Market Value Management of Listed Companies Controlled by Central Enterprises", which includes market value management in the performance evaluation of central enterprise leaders. CITIC Securities stated that this will provide long-term and effective institutional guarantees for state-owned enterprises to actively carry out market value management for listed companies. ——Focus on "attracting" and strengthening regulatory cooperation to attract more funds into the market. In response to the long-standing problems of "insufficient long-term funds" and "insufficient long-term funds" in the A-share market, the Central Financial Office and the China Securities Regulatory Commission jointly issued the "Guiding Opinions on Promoting the Entry of Medium - and Long Term Funds into the Market" in September, focusing on vigorously developing equity public funds, improving various policies and systems for the entry of medium - and long-term funds into the market, and other aspects. Recently, the personal pension system has been promoted nationwide, and specific pension savings and index funds have been included in the personal pension product catalog; Many insurance institutions are promoting the implementation of long-term assessment mechanisms. Making long money 'willing to come' and 'able to stay' is a long-term project that requires the cooperation of multiple departments. Currently, policies have grasped the crux of the problem, and efforts need to be made to strengthen cross departmental coordination and promote the effective implementation of policies as soon as possible, "said Tian Xuan, Dean of the National Institute of Finance at Tsinghua University. ——Strictly implement measures and continuously purify the market investment environment. In response to market problems such as financial fraud, the General Office of the State Council forwarded the "Opinions on Further Strengthening the Comprehensive Punishment and Prevention of Financial Fraud in the Capital Market" to the China Securities Regulatory Commission and other departments in July, focusing on strengthening the "three in one" punishment system of administrative, civil, and criminal. The China Securities Regulatory Commission has launched a special operation to crack down on financial fraud by listed companies. In the first 10 months of this year, 658 related cases were investigated and confiscated, with a total fine of 11 billion yuan, exceeding the total amount of last year. Liu Junhai, a professor at the Law School of Renmin University of China, said that the high pressure on financial fraud and other illegal acts continued, which demonstrated the determination of the regulatory authorities to maintain market fairness and helped foster a capital market ecology that encouraged long-term investment. This year, the reform of the capital market has significantly increased, reflecting the Party Central Committee's high attention to the capital market. Policies closely focus on stabilizing the market, shifting market construction from overly emphasizing financing to promoting investment and financing balance, strengthening investment side construction, and focusing on solving deep-seated problems that have existed in the market for a long time... These undoubtedly help to consolidate the institutional foundation for the healthy operation of the market and promote a more stable underlying logic for the long-term improvement of the capital market Tian Xuan said. Under the strong promotion of policies, the A-share market has shown many new changes in the layout of incremental funds for mergers and acquisitions. This year's market is unforgettable. In the first eight months, the market was sluggish, confidence plummeted to freezing point, and daily market turnover fell below 500 billion yuan at one point. After September 24th, the market reversed and old stock investors became active. Many friends around them entered the market one after another, and the daily market turnover also set a record of about 3.5 trillion yuan The viewpoint of individual investor Wang Pu is quite representative. Behind the active trading is a positive change in the funding situation, with multiple incremental funds entering the market. Fu Jingtao, Chief Analyst of A-share Strategy at Shenwan Hongyuan Securities Research Institute, stated that since the implementation of a package of incremental policies at the end of September, there have been three changes in the supply and demand of A-share funds: firstly, an increase in financing balance, reflecting an increase in trading capital activity; The second is the expansion of passive fund scale; Thirdly, the pricing influence of small and medium-sized investors has increased. From the perspective of financing balance, it has been increasing for several consecutive weeks, reaching a new high in recent years. As of the week of December 20th, the financing balance in the A-share market was approximately 1.88 trillion yuan. From the perspective of ETFs, institutional reports show that the size of stocks invested by passive funds in the entire market has climbed to 3.24 trillion yuan, surpassing the size of stocks invested by active funds. It is worth mentioning that the CSI A500 Index released this year has shone brightly, with more than 40 related funds established in about three months, with a total scale exceeding 300 billion yuan and a rapid growth in scale. A large number of individual investors enter the market through index funds. From the perspective of investment themes, market hotspots have emerged and sector rotation has accelerated, but the dividend theme basically runs through the whole year, which is closely related to the regulatory authorities' vigorous promotion of dividends and repurchases of listed companies. According to data from the China Securities Regulatory Commission, as of the end of October, A-share listed companies have announced mid-term cash dividends of 644.1 billion yuan and disclosed 1360 new repurchase plans, both in terms of quantity and amount, reaching a historical high. China's macroeconomy is shifting towards a stage of high-quality development, and the investment paradigm is shifting from pursuing high growth to assets with stable returns and cash flows Hua'an Fund believes that in the medium to long term, the central long-term interest rate may maintain a downward trend, further highlighting the importance of "undervalued, high dividend" dividend assets in strategic allocation. Industrial capital is strengthening its layout. In late September, the China Securities Regulatory Commission issued the "Opinions on Deepening the Market Reform of Mergers and Acquisitions of Listed Companies", making mergers and acquisitions a new highlight of the market. As of now, since the release of the "Six Measures for Mergers and Acquisitions", more than 300 listed companies have disclosed asset restructuring matters, showing characteristics such as active mergers and acquisitions of hard technology enterprises, accelerated restructuring and integration of central state-owned enterprises, and a resurgence of securities firm mergers. Mergers and acquisitions will continue to be the main focus of multiple industries such as biomedicine, securities, and media Many securities firms make such judgments in their annual industry analysis reports. In terms of policies, many places such as Beijing, Shanghai, and Shenzhen have introduced measures to support mergers and acquisitions. The Action Plan for Supporting Mergers and Acquisitions of Listed Companies in Shanghai (2025-2027) proposes to strive to land a number of representative merger and acquisition cases in key industries by 2027, and cultivate about 10 internationally competitive listed companies in key industries such as integrated circuits, biomedicine, and new materials. Of course, the foundation of market stability needs to be further consolidated. Watson emphasized that improving economic fundamentals and the profitability of listed companies are the foundation for the stock market to thrive and stabilize. Continuously strengthening the power of "long money" and "stability" will still be the focus of the capital market next year. The Central Economic Work Conference emphasized the need to stabilize the real estate and stock markets. Many institutions have stated that there will be significant external uncertainty risks for economic development next year, especially the possibility of escalating international economic and trade frictions, geopolitical conflicts, and other factors. This will cause disturbances to the stability of expectations and funds in the capital market. In response to this, regulatory authorities have issued a signal to be prepared and prepared in advance. The China Securities Regulatory Commission stated that it will enhance the forward-looking and proactive nature of market monitoring, early warning, and response, and strengthen the linkage supervision of domestic and overseas, on-site and off-site, and futures and spot markets; Accelerate the implementation of incremental policies, continuously use stable monetary policy tools, and strengthen and improve market expectation management. The People's Bank of China proposed to explore and expand the central bank's macro prudential and financial stability functions, innovate financial instruments, implement two monetary policy tools to support the stable development of the capital market, and maintain the stability of the financial market. Policy support is conducive to stabilizing investor expectations, and more importantly, promoting stability through reform. Among them, deepening the comprehensive reform of capital market investment and financing, and strengthening the long-term funding force are key tasks. In terms of investment side construction, we will steadily promote reforms such as public fund industry fees, and vigorously develop equity funds, especially index investments; Vigorously guide various public funds and asset management institutions to enhance their proactive management capabilities and enrich their product types; Further enhance the subjective initiative of listed companies and their major shareholders, strengthen the main responsibility of market value management, and improve the quality of listed companies. From the perspective of market capital flow, the net inflows of individual investors, financing funds, and foreign institutions have all increased recently. In 2025, the global capital reallocation is expected to bring incremental new vitality to RMB assets Shen Wan Hongyuan Chairman Liu Jian said. It is urgent to implement a long-term assessment mechanism in order to break through the bottlenecks of medium and long-term fund entry into the market. Li Qiusuo, Chief Domestic Strategy Analyst of the Research Department of China International Capital Corporation (CICC), suggested further relaxing the restrictions on the proportion of equity investment of some long-term funds, optimizing the concentration requirements, simplifying the investment approval process, and improving the flexibility and efficiency of long-term funds entering the market; Improve the financial derivatives market,