September 24, 2024 marked a historic day for A-shares as the market surged following the release of a comprehensive policy package. Within just a few trading days, the Shanghai Composite Index gained 1,000 points, with trading volume reaching a record high of 3.45 trillion yuan on October 8. This date confirmed the starting point of the current bull market cycle.
Over the past year, against the backdrop of successive policy releases, the A-share bull market has gradually entered its second phase. As of the anniversary, four major indices - the ChiNext Index, STAR 50, Beijing Stock Exchange 50, and Small-Cap Index - have achieved gains exceeding 100%.
From a sector perspective, robotics, semiconductors, and innovative drug tracks have rotated, igniting a structural bull market. After nearly six months of adjustment, A-shares began their second wave of upward momentum from late June this year. The Shenzhen Component Index reached new highs since September 14 last year, further confirming the long-term trajectory of this bull market cycle.
During the past year, A-shares recorded daily trading volumes exceeding 3 trillion yuan on five occasions. The market demonstrated clear characteristics including structural changes, sector rotation, and a technology-driven bull market. A-share total market capitalization broke through 100 trillion yuan for the first time, with the electronics sector's total market cap historically surpassing the banking sector to become the new market leader. Various ETF assets under management exceeded 5.31 trillion yuan.
In this bull market cycle, over 1,000 stocks achieved doubled returns. Nine sectors including mechanical equipment, electronics, power equipment, computers, automotive technology, chemicals, and biomedicine each produced more than 100 stocks with doubled gains. 170 individual stocks recorded gains exceeding 300%, primarily concentrated in mechanical equipment, electronics, computers, and automotive sectors. 42 stocks gained over 500%, mainly in high-growth tracks like semiconductors and innovative drugs. Three stocks achieved gains exceeding 1,000%, becoming the top performers of this rally. Notably, 12 of the top 30 gainers came from the Beijing Stock Exchange, highlighting the quality of this technology-driven bull market.
Stocks that achieved doubled returns in this cycle share common characteristics: first, small market capitalizations, with many doubled stocks having market caps below 5 billion yuan; second, distinct themes, with popular concepts like robotics, semiconductors, innovative drugs, and solid-state batteries posting substantial gains. From a policy perspective, multiple supportive measures have been released this year, clearly backing artificial intelligence, robotics, innovative drugs, and other emerging technology fields. Although these companies generally have modest profitability, they attracted capital due to high growth expectations.
Due to the significant rise in technology stocks, the market capitalization structure has undergone major changes. The top five companies by market cap on the ChiNext board present an entirely new landscape. Companies with market caps exceeding 100 billion yuan have shifted from being dominated by banks, non-bank financials, and petrochemicals to electronics, biomedicine, and other new economy sectors. Technology stocks have become the dominant force, particularly AI large language models and robotics-led technological innovation fields serving as market leaders. This has allowed investors who positioned early in technology sectors to achieve substantial returns, while some investors missed the bull market by focusing on traditional industries.
Currently, this rally has gradually unfolded, with domestic household savings beginning to flow toward capital markets and foreign investors becoming increasingly positive about A-shares. Goldman Sachs maintained its overweight rating on A-shares and H-shares in its latest report, forecasting 8% and 3% upside potential respectively over the next 12 months. The firm believes a liquidity-driven bull market is unfolding in Chinese stocks, with inflation expectations and AI autonomous development serving as key catalysts for this rally.
On September 22, the State Council Information Office held a press conference where central bank governor Pan Gongsheng, financial regulatory chief Li Yunze, securities regulator chair Wu Qing, and foreign exchange administrator Zhou Hexin introduced financial sector achievements during the 14th Five-Year Plan period. This collective appearance by top financial regulators came nearly one year after the September 24 pre-market government press conference, during which the Shanghai Composite Index has gained 40%.
Serving technological innovation has become an important direction for capital market development and reform. Reviewing capital market development, securities regulator chair Wu Qing emphasized that capital markets are accelerating their service to technological innovation, with market technology content further enhanced. Over 90% of newly listed companies in recent years have been technology enterprises or companies with high technology content.
Investment-side reforms are also a key focus. As of end-August, various types of medium and long-term funds collectively held approximately 21.4 trillion yuan in A-share tradable market capitalization, representing a 32% increase from the end of the 13th Five-Year Plan period. Future efforts will continue strengthening long-cycle assessments, continuously improving cross-border investment convenience, and attracting more capital inflows to enable global capital investment in China and shared growth.
Reviewing five years of capital market development, Wu Qing summarized five key achievements: first, the establishment of a comprehensive regulatory framework; second, a more complete multi-tiered, broadly covered market system; third, continuously improving coordinated investment and financing market functions; fourth, gradually perfected collaborative market stabilization mechanisms; and fifth, further formation of a fair and stable market environment.
Among capital market reform measures, investment-side reforms were listed as the top priority. Wu Qing emphasized accelerating investment-side reforms and promoting the construction of a long-term investment policy system. Regulatory authorities have issued guidance on promoting medium and long-term capital market entry, with multiple departments jointly releasing implementation arrangements for medium and long-term capital market entry at the beginning of the year. On May 7, regulators released an action plan for promoting high-quality development of public mutual funds, further increasing the proportion of long-cycle assessments exceeding three years for public funds.
Serving new productive forces development is the top priority for capital markets. Focusing on serving new productive forces development, authorities have successively launched 16 technology innovation measures, 8 STAR Market measures, and 6 M&A measures, making a series of optimization and improvement arrangements in areas including IPOs, mergers and acquisitions, and facilitating investment-management-exit cycles. In June this year, 1+6 reform measures including establishing a technology innovation growth tier were launched on the STAR Market. Since the release of the 6 M&A measures, 230 major asset restructuring deals have been disclosed.
Regarding future capital market development, Wu Qing stated that authorities will maintain steady progress, using comprehensive investment and financing reform as guidance to continuously enhance adaptability and inclusiveness across technology, systems, market functions, and regulatory enforcement, promoting more efficient resource allocation and enabling quality enterprises and various capital sources to better unleash vitality and realize value.
Four key areas were outlined: first, enhancing the adaptability of the multi-tiered capital market system; second, better leveraging the stabilizing role of medium and long-term capital, continuously strengthening long-cycle assessments, improving cross-border investment and financing convenience, and attracting more capital inflows to enable more global capital investment in China; third, continuously improving listed company quality and investment value; fourth, enhancing regulatory precision and effectiveness. These measures will undoubtedly provide support for the current bull market cycle.
Although Monday saw significant declines in both Shanghai and Shenzhen markets, bargain-hunting capital entered toward the close, leading to rapid recovery with the ChiNext Index turning positive and the Shanghai Composite Index significantly narrowing losses. The current market is experiencing some volatility after the previous rapid rise, mainly due to profit-taking pressure and some investors securing gains ahead of the National Day holiday to avoid uncertainty. However, the market's upward trend itself remains unchanged.
The perennial question of whether to hold cash or stocks during holidays ultimately depends on asset quality. If holding quality stocks and funds, investors can confidently hold positions through the holiday. If holding stocks with excessive gains lacking fundamental support, investors may choose to secure profits early and adjust positions after the holiday. This bull market cycle is expected to continue for two to four years. Investors are advised to maintain confidence and patience, seize this bull market opportunity, and strive to achieve wealth growth.