Discussing the Ministry of Finance's press conference: the atmosphere and purpose are more important than the scale.

The policy meeting did not specify the specific operational details or the targeted data to be achieved, but the general direction is quite clear.
Speaking of my personal focus,First, to support local government debt, second, to find ways to stabilize the real estate market, and third, to ensure people's livelihoods.These directions once again demonstrate the significant guiding role of domestic policies in the market. As the old saying goes, one must take care of their own children, so when it comes to local debt issues, it's best to resolve them locally. Of course, if there is too much debt and the local government can't handle it, there are still methods and measures at higher levels.
In essence, this is another warning, but warnings aside, consequences still need to be borne. Such measures have both advantages and disadvantages. The advantage is that ordinary people do not have to worry about local bond defaults for the time being, after all, in those less developed industrial areas, people's livelihoods still rely on these bonds. The disadvantage is that some lessons that should be learned may not have been truly internalized. Looking at the issue from different perspectives leads to different conclusions.
However, I feel that this may be the last time to address local debt issues on such a large scale. The attitude of the meeting is quite resolute: stimulating the economy is definitely a top priority. As a matter of fact, there are still many cards in hand that have not been played yet, it depends on the international situation and the domestic circumstances before slowly revealing them.
The performance of the stock market next Monday may not be very strong in my estimation, but real estate stocks and brokerage stocks may have a chance for a rebound. However, no one dares to guarantee the extent of this increase, so caution should prevail.

Regarding the press conference held by the Ministry of Finance on the morning of October 12, 2024, let's further discuss two points.

First, the necessary people will come, and incremental funds will definitely come.；Secondly, what's more important than scale is the atmosphere and purpose.

In the long run, the direction and pace of policies need to be correct.

In the short term, the atmosphere and pace of the press conference need to be appropriate.

Also important to note,The stock market really cannot be predicted. There are no bull markets or bear markets, only fluctuations.。

Perhaps after meetings, publications, promotions, and encouragement information, the stock market starts to rise before taking any actual action. Perhaps it will only rise when a large amount of real silver and gold enters the market. Perhaps the situation will only warm up when the real economy and industry improve. It would be best if the market heated up directly before policies were introduced and funds were released.

Once contacted with a state-owned rescue fund, set up to deal with the sharp drop in the stock price of listed companies and the risk of forced liquidation due to excessive equity pledges. It took a long time from construction to official operation. After the establishment of the rescue fund and the arrival of funds, the company's stock price rose. No need for relief, everyone is happy.

It can be said that this press conference provided top-level policy support within the authority of the Ministry of Finance. The issuance of national bonds involves budget adjustments, which must be approved by the Standing Committee of the National People's Congress, otherwise it would violate legal procedures. The Ministry of Finance giving advance notice and reminders before the process is completed is of great significance. Specific amounts will not be disclosed this time, and may be announced after the approval of the Standing Committee of the National People's Congress by the end of this month. The most important thing is the attitude.Signaling a shift from a restrictive fiscal policy to an expansionary fiscal policy.

If the future fiscal policy incremental scale is not less than 4 trillion, it will directly boost the GDP growth rate in the fourth quarter to above 5.0%. This will smoothly achieve the annual growth target of around 5.0%.

Debt-for-equity swapsThe term was mentioned multiple times at this meeting. Objectively speaking, in terms of objectives, debt-for-equity swaps may be the primary factor, followed by the stock market, and then further.

Citic Securities Chief Economist Li Ming also mentioned that in the management of local debt, debt-for-equity swaps will be the focus of this round of fiscal policy. This measure will significantly ease the pressure of local government debt, which is bullish for local government economic development, supporting the "three guarantees" policy.

However, hopefully there can be more purposes.

Looking at the market's feedback from the previous NDRC press conference, using this funding to increase infrastructure investment, strengthen subsidies for replacing old with new, may not necessarily receive market approval. If more funds can be used to stimulate consumption, and innovative measures taken, that would be a positive move. If clear guidance can be provided on next year's policies, and a keen commitment to "taking all necessary measures to immediately stimulate the economy", that would be a pleasant surprise.