**Market Overview** Despite no major military action by the Trump administration against Venezuela, markets remained resilient. Instead, the financial sector received a boost after China’s Financial Regulatory Authority announced adjustments to risk factors for insurance businesses, lifting Hong Kong stocks in a rebound. Over the weekend, the U.S. released a revised National Security Strategy, emphasizing a recalibration of economic ties with China based on reciprocity and equality, signaling a shift toward economic self-reliance and defensive posturing.
**Regulatory and Policy Developments** Significant reforms are underway for fund managers’ compensation, with potential salary cuts exceeding 30% for underperformance. China Securities Regulatory Commission (CSRC) Chair Wu Qing highlighted policies encouraging differentiated supervision, particularly easing capital and leverage constraints for high-quality institutions to enhance efficiency. From insurance to securities, positive signals are emerging, potentially catalyzing incremental capital inflows.
**Key Events Ahead** - **Fed Meeting (Dec 11, 3:00 AM ET)**: A 25bps rate cut is widely expected; focus remains on whether the Fed will halt balance sheet reduction. - **China’s November Financial Data**: Critical metrics like new RMB loans, aggregate financing (M1/M2), and social financing will be released. - **Policy Meetings**: Mid-December will see China’s Politburo meeting and Central Economic Work Conference, setting the tone for economic priorities.
**Sector Highlights** - **Healthcare**: The 2025 National Reimbursement Drug List added 114 drugs, including 50 innovative therapies, with an 88% success rate (vs. 76% in 2024). The first commercial insurance innovation drug list included 19 entries. - **AI**: OpenAI may release GPT-5.2 ahead of schedule, with market attention on potential breakthroughs.
**Stock in Focus: Midea Group (00300)** Midea unveiled its humanoid robot "Milo U," a six-limbed wheel-footed prototype aimed at advancing robotics commercialization. Shares hit yearly highs amid Q4 demand and cost pressures, reflecting resilience. Analysts attribute the rally to: 1. A 4.8% dividend yield, surpassing state-owned banks. 2. Expansion into robotics and smart home tech via M&A, boosting valuations.
**Brokerage Sector Reforms**
CSRC Chair Wu Qing outlined priorities for securities firms:
1. Enhancing investor-centric wealth management services.
2. Differentiated supervision for small/foreign brokers, with eased capital/leverage rules for top players.
3. Shifting focus from scale to quality growth.
M&A activity (e.g., GTJA-Haitong, GF Securities integrations) is reshaping the sector, aiding scale and synergy. Key H-shares to watch:
**Market Data** - Hang Seng Index (HSI) Dec futures: 109,683 open contracts; net 45,041. - HSI bullish bias persists near 26,085, with bearish warrants clustered around mid-range resistance.
**Closing Insight** Last week saw divergence in tech: Meituan’s "incremental competition" weighed on sentiment, while Xiaomi’s buybacks and dual-listed autonomous driving stocks outperformed, underscoring preference for hard tech. With policy signals (e.g., Economic Work Conference) guiding markets, selective exposure to high-conviction, fundamentally sound assets is advised over broad bets.