CITIC SEC released a research report stating that the adjustment to margin requirements does not affect the broader direction of the market's volatile upward movement, but it will impact its structure. Speculation in thematic sectors is intensifying, ending the unilateral trend driven purely by narratives and capital rotation. As the annual report preview period approaches, the weight of performance-based clues is beginning to rise again. The massive redemptions from ETFs are part of counter-cyclical regulation and also provide a window for allocation-focused funds to calmly "enter the market." Regarding portfolio construction, a good portfolio should offer a positive experience, low resistance, and anti-anxiety properties; this is the advantage of building a portfolio based on the "re-rating of resources + traditional manufacturing pricing power" (chemicals, non-ferrous metals, power equipment, and new energy). On this foundation, investors can increase allocations to non-bank financials (securities, insurance) on dips, while also enhancing returns through select service consumption sectors (such as duty-free, airlines) or high-growth sectors (like semiconductor equipment). The main views of CITIC SEC are as follows:
Historically, an increase in margin requirements has effectively reduced market volatility in the short term. On November 13, 2015, the minimum margin requirement was raised from 50% to 100% (applicable only to new margin contracts). In the 30 trading days prior to the adjustment, the standard deviation of the Shanghai Composite Index's daily returns (i.e., volatility) was approximately 1.61%, with a maximum gain of 20.2% during the period. In the 30 trading days following the adjustment, volatility fell to 1.45%, the maximum drawdown was only 5.9%, and the index declined only slightly by 1.2%. From a trading volume perspective, after the margin requirement increase, market turnover noticeably shrank, and investor sentiment cooled significantly. In the 20 trading days before the adjustment, the average daily turnover for A-shares was 1,029.8 billion yuan; in the 30 trading days after the adjustment, the average daily turnover fell to 877.4 billion yuan, a decrease of 14.8%. A constructed investor sentiment index (5-day moving average) also rose rapidly from 16.6 at the end of September 2015 to 64.6 by mid-November (on a scale of 0-100), indicating short-term overheating. Approximately 20 trading days after the margin adjustment, it fell back to around 18.0, demonstrating a clear cooling effect from the policy. Drawing an analogy between November 2015 and the present, the similarity lies in the high enthusiasm for thematic speculation, coupled with relatively restrained and subdued sentiment towards blue-chip stocks. Since the beginning of 2026, the average daily A-share turnover has been 3,158.5 billion yuan, with the investor sentiment index (5-day MA) reading at an absolute high of 98.6; the adjustment to margin requirements is expected to guide the market towards a moderate cool-down.
Currently, the proportion of margin buying in the overall market is not particularly high, but purely thematic sectors are likely to be more significantly affected by the policy adjustment. Looking at the proportion of margin buying volume to total turnover in the Shanghai and Shenzhen markets, the average since the start of 2026 has been 11.18%, lower than the average of 12.11% in the 20 trading days before the 2015 margin adjustment. Structurally, during the phase of rapid margin balance growth from July to August last year (a cumulative increase of over 600 billion yuan in two months), the main increases occurred in sectors like electronics, computers, communications, and pharmaceuticals, which are essentially centered around high growth and strong earnings expectations. However, since December last year, only three sectors—defense/military industry, media, and non-ferrous metals—have seen significantly higher net margin buying compared to July-August, with increases of 109.4%, 56.1%, and 9.0% respectively. Increases in other sectors have been very limited. Considering the rapid rise in global commodities since December, the upward revision in earnings expectations for the non-ferrous metals sector is basically in line with its less than 10% net margin buying growth. In fact, this recent surge in margin balances has primarily occurred in only two thematic areas: commercial aerospace and AI applications. From this perspective, the current margin requirement increase appears more like a targeted cooling of overheated thematic speculation, with purely thematic sectors that rely heavily on turnover, information dissemination, and capital rotation being more affected.
The timing of this regulatory adjustment is relatively early, expressing a determination to promptly curb thematic speculation. Adjusting margin requirements is not the only regulatory tool available; abnormal trading monitoring, trading halts for verification, and account restrictions are all feasible measures. Taking trading halts for verification as an example, seven listed companies have been suspended due to abnormal stock price fluctuations since the start of 2026. Furthermore, the verification standards for some companies' abnormal movements have deviated from past practices, which has also curbed attempts by active capital to test regulatory boundaries. The current market is still in an upward trend phase where "sentiment favors gains," and many active funds may still be looking for opportunities to re-enter thematic investments. Particularly for themes with genuine industrial trends, like commercial aerospace, a complete run-up in one go is unlikely; after sharp adjustments and position shifts, short-term fluctuations may recur. Conversely, for themes driven purely by narratives and capital rotation, a review of past themes—such as live-streaming e-commerce in 2020, Metaverse/NFT in 2021, the "China-specific valuation" theme in 2023, and low-altitude economy, humanoid robots, and solid-state batteries in 2024—reveals that they typically peak around 25-55 trading days (average 41 days) after the rally begins, followed mainly by volatile or declining trends.
The market has now entered the annual report preview period. Currently, over the past month, stocks with negative pre-announcements have significantly outperformed those with positive pre-announcements, which is abnormal compared to previous years. Using companies that had announced preliminary results as of January 16, 2026, as a sample, the cumulative price changes since December 2025 were calculated separately for groups with positive and negative earnings previews. As of January 16, 2026, the negative preview group had a cumulative gain of 21.1%, 1.4 percentage points higher than the positive preview group (19.7%). This outperformance was particularly pronounced in the most recent week, with the maximum excess return reaching 5.5% (on January 14). In the annual report seasons of 2020, 2023, and 2024, there was a clear pattern of positive preview stocks outperforming negative preview stocks, with the outperformance gap widening as the period progressed (closer to mid-to-late January). During the 2021 annual report preview season (December 2021 - January 2022), negative preview stocks initially outperformed, but a reversal in their relative performance began around mid-January 2022.
The strengthening US dollar and Bitcoin indicate that global markets are entering a phase of verifying the sustainability of AI demand. Recently, both Bitcoin and the US Dollar Index have strengthened. As of January 16, 2026, Bitcoin's price was $95,500, up approximately 9.2% from $87,500 at the end of last year. The US Dollar Index recorded 99.4, up about 1.1% from 97.9 at the end of last year. Typically, a strengthening dollar environment does not support sustained purely thematic speculation. The Nasdaq Index has been moving sideways for several months. The coming months represent a critical window for global tech giants to release their financial reports and guidance intensively, testing the sustainability of AI demand. If results continue to exceed expectations, market attention will shift back from themes to real industrial trends capable of delivering strong earnings in the present. On January 15, TSMC released its quarterly report and new guidance. The company's revenue, gross margin, and profit all exceeded previous guidance, and it significantly raised its 2026 capital expenditure guidance to $520-560 billion (compared to $409 billion in 2025), reflecting continued tight capacity and management's strong confidence in AI demand. From this perspective, the tightness in chip capacity remains a current reality for the AI industry, and high-growth sectors like semiconductor equipment may experience periodic strength.
The massive redemptions from ETFs this week are part of counter-cyclical regulation and also provide a window for allocation-focused funds to calmly "enter the market." During the week of January 12-16, ETF net redemptions reached 141.2 billion yuan, setting a historical record for weekly net redemptions. Net redemptions on January 15 and 16 alone were 68.7 billion yuan and 86 billion yuan, respectively. Structurally, the redemptions were concentrated in broad-market ETFs, which saw cumulative redemptions of 212.8 billion yuan for the week, with CSI 300-related products alone contributing 103.5 billion yuan in net redemptions. In contrast, sector/thematic ETFs continued to see inflows, with net subscriptions of 71.6 billion yuan for the week, marking the third consecutive week of net inflows. Following this week's concentrated redemptions from broad-market ETFs, the net inflow into sector/thematic ETFs since the start of 2024 has, for the first time, surpassed that of broad-market ETFs. Additionally, according to reports, multiple heavyweight stocks saw large sell orders during the closing auction on January 14; these phenomena are likely part of counter-cyclical regulatory measures. A review of three rounds of broad-market ETF net redemptions since the "September 24th" market event shows that the Shanghai Composite Index overall rose during these periods, indicating that such redemptions do not alter the market trend. For allocation-focused funds, this type of counter-cyclical regulation-driven market cooling can effectively alleviate performance pressure, prevent style drift and irrational actions, and present opportunities to increase holdings in high-performing stocks. For institutions like China Securities Finance and Central Huijin, counter-cyclical减持 can recover some investments to prepare for potential future risk events and stabilize volatility.
A good portfolio should offer a positive experience, low resistance, and anti-anxiety properties; this is the advantage of building a portfolio based on the "re-rating of resources + traditional manufacturing pricing power." Following the basic logic of "resource + traditional manufacturing pricing power re-rating," an equally weighted portfolio constructed from chemicals, non-ferrous metals, new energy, and power equipment ETFs balances both return potential and drawdown control, whether during theme-dominated phases or phases where earnings-driven stocks outperform. Building on the aforementioned portfolio, investors can increase allocations to non-bank financials (securities, insurance) on dips. During periods of counter-cyclical regulation, investors have ample time to make allocations without chasing prices higher. RMB appreciation might also prompt a relaxation of cross-border capital account controls, accelerating the global expansion of non-bank financial firms. Furthermore, returns can be enhanced by including some contrarian domestic demand sectors (such as duty-free, airlines, quality property developers, REITs, mass consumer goods) to capture potential positive policy surprises and reduce portfolio volatility, alongside high-growth, high-certainty sectors (like semiconductor equipment driven by memory expansion).
Risk factors include intensified Sino-US friction in technology, trade, and finance; domestic policy strength, implementation effectiveness, or economic recovery falling short of expectations; tighter-than-expected domestic and international macro liquidity; further escalation of conflicts in Russia-Ukraine and the Middle East; and slower-than-expected digestion of China's real estate inventory.
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