Banking and insurance institutions' equity investment confidence index shows a significant increase

Staff Reporter Ling Cuihua

On February 12, the China Banking and Insurance Asset Management Industry Association released the Q1 2026 and full-year 2026 Investment Confidence Indices for the banking and insurance asset management industry. The indices show that fixed income investment confidence among banking and insurance institutions has decreased compared to the same period last year, while equity investment confidence has significantly increased.

Industry insiders believe that the increased investment confidence among banking and insurance institutions stems from optimistic expectations about the economy and policies. This boost in confidence is also expected to attract more long-term funds into the market, supporting steady development of the capital market.

A-shares Have Triple Support

After the China Insurance Asset Management Industry Association was renamed the China Banking and Insurance Asset Management Industry Association, this year’s survey scope for the industry confidence index was further expanded.

This year’s survey included 160 insurance institutions and 32 bank wealth management companies, compared to 186 insurance institutions surveyed last year. Specifically, in the first quarter, the macroeconomic confidence index among banking and insurance institutions was 58.08, fixed income investment confidence was 51.20, and equity investment confidence was 67.55. In the first quarter of 2025, these three indicators were 58.62, 64.53, and 58.04 respectively. Compared to last year, confidence in fixed income investments has slightly declined, while confidence in equities has risen sharply.

Looking at the sub-indicators of equity investment confidence, banking and insurance institutions’ confidence in corporate profits for this quarter is 64.80, confidence in the overall trend of A-shares is 78.74, and confidence in their holdings is 70.26.

In response, Everbright Yongming Asset Management Co., Ltd. (hereinafter “Everbright Yongming Assets”) told Securities Daily that the upward trend in A-shares since April 2025 is essentially driven by policy support and liquidity easing amid a slow economic recovery. In the first quarter, A-shares are supported by “policy backing + increased capital inflows + earnings catalysis.” From a liquidity perspective, current liquidity remains ample, and the full release of policy dividends in 2026 will bring larger capital inflows, mainly from insurance funds, public funds, and other institutional investors, supporting the market’s continued rise in the first quarter. Meanwhile, corporate earnings are approaching a turning point, indicating a shift in market drivers from valuation-based to profit growth potential. Therefore, it is expected that A-shares will continue to fluctuate upward in the first quarter.

Lu Xiaoyue, founder of Yanshu Asset Management, told Securities Daily that the market generally remains cautiously optimistic about the first quarter and the full year of 2026 for A-shares. The core logic supporting a bull market still exists, such as industrial upgrades, policy support, and capital inflows. The market is shifting from valuation-driven to profit-driven, with potential for volatility but also many structural opportunities.

Structural Opportunities Persist

Looking at the annual confidence indices, banking and insurance institutions’ confidence in the macroeconomy for the full year is 57.41, fixed income investment confidence is 55.63, and equity investment confidence is 67.61. In 2025, these were 59.56, 67.56, and 62.72 respectively. Compared to last year, confidence in fixed income investments for the full year has decreased, while confidence in equities has risen significantly.

Regarding the sub-indicators influencing equity investment confidence, confidence in corporate profits for the full year is 71.12, confidence in the overall trend of A-shares is 79.02, and confidence in holdings is 70.26.

Everbright Yongming Assets stated that looking ahead to the full year, domestic market valuations still favor equities, with high-quality A-shares offering relatively high value globally. Compared horizontally, A-shares still have a clear valuation advantage among major global stock indices; vertically, in a long-term low-interest-rate environment, equity assets remain attractive.

The firm expects A-shares’ valuation in 2026 to still have room for uplift, with corporate earnings contributing to the index’s rise. A-shares will shift from a “valuation recovery bull” in 2025 to a “profit-driven slow bull,” with structural opportunities throughout. On one hand, signs of improving corporate profits are clear, and as global re-industrialization advances in 2026, profits from advanced manufacturing and export-oriented companies are expected to further grow. On the other hand, risk appetite may increase, with the Fed’s rate cut expectations weakening the dollar and the RMB potentially appreciating, attracting continued foreign investment into Chinese assets. However, the company also warns of two major risks: first, if technological applications in the tech sector fall short of expectations, it could trigger crowded trades and adjustments; second, fluctuations in commodity prices could impact cyclical sectors. Overall, the market is expected to steadily rise with gradually increasing lows, providing long-term investment value.

The rising confidence in equities is likely to attract more funds into the market. For insurance institutions, equity investments also need to consider the impact of new accounting standards on profit and loss statements. Lu Xiaoyue explained that a “dumbbell” asset allocation has become the mainstream strategy for insurance funds: one end consists of high-dividend, stable-profit listed companies as a “ballast,” and the other end involves high-growth assets as an “offensive” component, with strict position controls. Additionally, market risk management, especially fair value fluctuations, has become a top priority. The risk control models for insurance funds will be comprehensively upgraded, with stricter monitoring thresholds for equity exposure, industry concentration, and volatility.

(Edited by Qian Xiaorui)

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