Liquidity is expected to remain loose in April, and Bank ETFs like Huaxia (515020) may benefit from sector valuation reshaping.

As of 10:25 on March 31, 2026, the CSI Bank Index (399986) rose by 0.66%, with constituent stocks Agricultural Bank of China up 2.54%, China Merchants Bank up 1.76%, and China Construction Bank up 1.48%. The Bank ETF Huaxia (515020) increased by 0.59%, with the latest price at 1.71 yuan.

The People’s Bank of China announced on April 1 that it conducted a 500 million yuan 7-day reverse repurchase operation, with a winning rate of 1.4%. Amid 78.5 billion yuan of reverse repos maturing on the same day, the central bank achieved a net withdrawal of 78 billion yuan. This reverse repo operation scale is the lowest since 2015.

Analysts believe that, in a context of relatively loose liquidity, this signals the central bank’s intention to maintain stability and guide interest rates within a reasonable range. Overall, although there is limited room for a significant decline in interest rates, liquidity conditions are expected to remain ample, which may benefit bank funding.

HuaFu Securities believes that in 2026, proactive fiscal policies and moderately easing monetary policies will work together, with banks’ non-performing loan ratios continuing to decline, and the uncertainty of bank asset quality significantly decreasing. Since 2025, net interest margins have shown signs of stabilization, and performance pressures are marginally easing. The sector is entering a period of fundamental recovery and valuation reshaping.

The Bank ETF Huaxia (515020) is the ETF tracking the CSI Bank Index (399986) with the lowest comprehensive fee rate, with connection fund Class A 008298; connection fund Class C 008299; connection fund Class D 024642.

Daily Economic News