Founder Securities economist cites reforms as catalyst for A-share market outlook
Founder Securities chief economist Yan Xiang states that recent capital market reforms have improved the long-term outlook for Chinese A-shares despite current market volatility.
Capital market reforms in China have significantly increased the weight of the technology sector within the A-share market. According to Yan Xiang, chief economist at Founder Securities, platforms such as the STAR Market and ChiNext now facilitate the majority of new listings, with the broader TMT sector (technology, media, and telecommunications) representing more than 25 percent of the total market capitalization. This shift reflects a move away from traditional banking and real estate dominance.
Corporate earnings have shown resilience, with 73 percent of Shanghai- and Shenzhen-listed firms reporting profits for the first three quarters of 2026. Total net profits reached RMB 5.1 trillion, an 8.5 percent year-on-year increase. High-growth sectors such as artificial intelligence and robotics have led these gains, and expectations remain for continued earnings growth as nominal GDP recovers.
Market valuations are currently at historic lows, providing a potential floor for equity prices. Furthermore, the China Securities Regulatory Commission (CSRC) reports that dividend payments and share buybacks by listed companies have surged, reaching RMB 2.1 trillion in 2026—a figure significantly higher than the capital raised through IPOs. Yan expects ongoing regulatory efforts to further stabilize the market and improve accessibility for international investors.