How much incremental capital has flowed into A-shares this year? Huatai: Net inflow may reach 1.6 trillion yuan, with household deposits and retail investors accounting for 40%.

How much incremental capital has flowed into A-shares this year? Huatai: Net inflow may reach 1.6 trillion yuan, with household deposits and retail investors accounting for 40%.

In their latest report released on January 14, 2026, the Huatai Securities strategy team noted that thanks to a significant improvement on the supply side of capital, China's A-share market is expected to see a net inflow of approximately 1.6 trillion yuan in incremental funds in 2026. This projection is based on an overall estimated inflow of 2.6 trillion yuan, with about 1 trillion yuan in capital demand subtracted. If this forecast materializes, the net inflow in 2026 will be substantially higher than the 1.3 trillion yuan in 2025 and 1.1 trillion yuan in 2024, highlighting further optimization of market liquidity conditions.

The core viewpoint of the report holds that the increase on the capital supply side mainly stems from the accelerated “migration” of household savings and policy-driven entry of long-term capital. In 2026, up to 60 trillion yuan of term deposits with maturities over one year will come due, up 8 trillion yuan from 2025, providing a huge potential liquidity reservoir for the market. Meanwhile, with the support of policy, insurance funds are expected to increase their equity allocations, bringing about 800 billion yuan in “ballast” funds to the market.

Analysts Yan Meng and Wang Weiguang from Huatai Securities have detailed the structure of funds in their report. In addition to the passive market entry of low-risk-appetite funds, the recovery in fundamentals is expected to attract back high-risk-appetite funds, including retail investors, margin financing, and private equity, which are anticipated to contribute a combined net inflow of about 900 billion yuan.

For investors, this liquidity panorama means that the A-share capital flow will show a pattern of “strong supply and steady demand.” After supply-demand offset, the remaining 1.6 trillion yuan net buying power will serve as a solid foundation for asset pricing in the 2026 A-share market. The commonly watched liquidity “gravity” is evolving in a direction favorable to the bulls.

Household Savings Activation: 60 Trillion Maturing Funds Seeking Outlets

Structural shifts in household asset allocation are the biggest variable for capital supply in 2026. According to Huatai Securities, the total market scale of term deposits (over one year) maturing in 2026 will reach a historic high of 60 trillion yuan. Against a backdrop of sluggish real estate demand and persistently falling deposit rates, the path for revitalizing this capital is becoming clearer, with a high likelihood of flowing into financial investments.

Based on data from the “China Asset Management Market 2024–2025” report, Huatai Securities assumes that 8% of maturing deposits in 2026 will be invested in non-monetary asset management products, and further estimates that about 14% of this will be converted into stock market value. Accordingly, even entry of household funds with medium- and low-risk preferences could bring about 650 billion yuan of incremental capital to A-shares.

Return of Risk Appetite: High-Risk and Long-Term Funds Resonating

Assuming a market environment with strong volatility underpinned by fundamentals, high-risk-appetite funds are showing robust willingness to flow in. The report estimates that net inflow of retail investor funds in 2026 will be around 400 billion yuan. At the same time, margin funds and private equity remain active, and with margin balances at historic highs and private equity filings relatively stable, margin and private equity funds are expected to see net inflows of 200 billion yuan and 300 billion yuan respectively, for a total of 500 billion yuan increment.

In terms of institutional long-term capital, the scale of insurance funds entering the market is particularly notable. By the end of Q3 2025, the equity investment ratio of life and property insurance companies still has room below regulatory caps. With policies urging leading insurers to increase their equity allocations, and using five major listed insurers (China Life, Ping An, PICC, Taiping, New China Life) 2024 premium scale as the base, assuming that the proportion of new premiums invested in A-shares rises to 30%, insurance funds are expected to bring about 800 billion yuan of massive incremental capital.

Additionally, the narrative of foreign capital return in 2026 is expected to remain strong. Driven by the start of the US Federal Reserve's rate-cutting cycle, RMB appreciation, and changes in the China-US interest rate spread, the external liquidity environment will marginally improve. The report forecasts that foreign holdings will likely see a slight rebound in 2026, with net inflows for the year expected to be around 100 billion yuan.

Capital Demand Side: IPOs and Share Reductions Return to Normal

While capital supply is greatly expanding, the demand side is keeping a relatively moderate growth trend. The report estimates that total capital demand for A-shares in 2026 will be about 1 trillion yuan.

Primary market financing functions are gradually returning to normal. As IPOs and private placements pick up pace, IPO fundraising in 2026 is expected to reach about 200 billion yuan, with private placements at about 500 billion yuan. In the secondary market, despite ongoing constraints from new share reduction rules, shareholder reduction behavior is expected to remain steady, with net reductions of about 300 billion yuan for the year.

When it comes to market self-adjustment mechanisms, as market expectations for 2026 tend to be strong, the need for bottom-style buybacks declines, and annual buyback totals are projected to be about 150 billion yuan, maintaining relative stability. At the same time, funds like Huijin (“national team”) in a strong market are expected to assume more of a stabilizer role rather than being a main source of incremental funds.

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