Since July 11, the banking sector has exhibited a phased downward trend. Taking Agricultural Bank of China as the most representative example of previous gains, the bank's stock price reached a historical high of 7.55 yuan before retreating to around 6.7 yuan currently.

Every July marks the concentrated dividend distribution period for bank stocks, with some arbitrage funds following a "take dividends and leave" strategy that puts short-term pressure on stock prices. From a credit demand perspective, social financing and credit data for July-August fell below expectations, reflecting weak financing appetite from the real economy and insufficient momentum for banks' asset-side expansion.

On September 18 Beijing time, the Federal Reserve announced a 25 basis point rate cut, resuming rate cuts after a 9-month pause. The market expects that China also has room for further rate cuts and reserve requirement ratio reductions, which would put additional pressure on banks' future net interest margins.

Recently, shareholders and senior executives of multiple banks have announced plans to increase their holdings in their respective bank stocks. Several banks stated in their announcements that the buyback plans are based on recognition of the banks' long-term investment value and support for their long-term development.

The buyback plans have provided some boost to stock prices. As of the midday close on the 19th, Qilu Bank (601665.AH), which just completed management buybacks, led the gains with an increase of over 2.5%.