According to a research report from Guotai Haitong Securities Co., Ltd., the equity market experienced a notable correction in March 2026. However, household risk preference has shown resilience, with new account openings remaining at high levels and a rebound in the issuance of new equity-linked products. In the current low-interest-rate environment, there is a strong incentive for household deposits to shift towards higher-yielding assets. As a crucial service intermediary for equity assets, securities firms stand to benefit across multiple dimensions from this process of household capital entering the market. The sector's profitability is expected to continue its high growth in the second quarter, presenting a favorable opportunity for securities firm allocation. The main views of Guotai Haitong Securities are as follows:
Household asset allocation in March 2026 was primarily focused on fixed-income assets. By the end of March 2026, the total market size of wealth management products available for household allocation reached 361.6 trillion yuan, a month-on-month change of +0.4% and a year-on-year change of +11.0%. The net value increment was 1.3 trillion units, a month-on-month change of -79.0%. Specifically, the increments for public funds, private funds, private asset management products, bank wealth management products, and deposits were -1073.0 billion, +124.1 billion, -94.7 billion, -1054.0 billion, and +2437.1 billion yuan, respectively, contributing -83%, +10%, -7%, -82%, and +189% to the overall increment.
Despite the equity market's rise and subsequent fall in March, household willingness to enter the market remained relatively positive. In March 2026, influenced by factors such as increased geopolitical uncertainty and ample liquidity, the yield on the 10-year government bond saw a marginal increase, and the CSI Aggregate Bond Index rose by 0.3%. The equity market experienced a volatile correction, with market risk appetite declining due to the US-Iran conflict. In March, the performance of the stock fund index, mixed fund index, bond fund index, and money market fund index was -7.76%, -7.56%, -0.16%, and +0.10%, respectively. Despite the stock market adjustment, household willingness to enter the market remained active. In March, 4.6 million new A-share accounts were opened, a month-on-month increase of 82.4%, making it the second-highest month for new account openings since 2025.
The decline in the net value of public funds dragged down the overall scale, but new issuance of equity-linked products rebounded. By the end of March, the total scale of public funds in the market reached 37.5 trillion yuan, a month-on-month change of -2.8%, with an average unit net value of 1.15 yuan, a month-on-month change of -2.6%. Specifically, the scale of equity funds, mixed funds, bond funds, and QDII funds changed by -9.2%, -8.0%, +1.3%, and -5.9% month-on-month, respectively. Regarding new issuance, the market issued 1131.8 trillion units of new fund shares in March, a month-on-month change of +24.9%. Among these, new equity-linked issuance increased by 41.7% month-on-month, while new bond fund issuance rose by 34.1% month-on-month.
The scale of private funds/private asset management continued steady growth, with a recovery in new private asset management issuance. By the end of March, the outstanding scale of private funds was 22.7 trillion yuan, a month-on-month change of +0.5%. Newly registered private funds amounted to 119.3 billion yuan, a month-on-month change of -10.3%. In March, the outstanding scale of private asset management was 12.4 trillion yuan, a month-on-month change of -0.8%. Within this, the scale of equity-linked, fixed-income, commodity and financial derivatives, and mixed categories changed by -2.0%, -0.7%, +3.3%, and -0.1% month-on-month, respectively. New issuance of private asset management products in March reached 122.01 billion yuan, a month-on-month change of +55.9%.
For wealth management/insurance/deposits, the outstanding scale of bank wealth management products in March reached 29.0 trillion yuan, a month-on-month change of 3.50%. Specifically, the scale of fixed-income, equity-linked, and mixed categories changed by -3.9%, +12.5%, and +10.9% month-on-month, respectively. In March, the insurance industry's premium income was 2310.4 billion yuan, a year-on-year increase of 6.2%, with life insurance premium income up 7.3% year-on-year and property insurance premium income up 2.8% year-on-year. The outstanding amount of RMB household deposits was 173.6 trillion yuan, a month-on-month change of +1.4%, with an increment of 2.44 trillion yuan.
Investment Recommendation: Previously, the securities sector was affected by factors such as capital flows, leading to a valuation adjustment to historical lows. Currently, the sector's price-to-book ratio relative to the overall market is below the 1st percentile historically, indicating ample room for recovery. Looking ahead, recent performances in both the stock and bond markets are favorable for securities firms' businesses. The sector's profitability in Q2 is expected to surpass that of Q3 2025, supporting a positive outlook for continued high growth in fundamentals. In terms of stock selection, as the industry enters an era of competition among leading firms, high-quality top-tier securities firms currently demonstrate significant advantages in ROE levels, growth potential, and valuation attractiveness. The recommendation is to focus on two main themes: international business and wealth management. Recommended stocks are CITIC Securities and Industrial Securities.
Risk Warning: Significant volatility in the equity market.
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