The "2026 Global and China Capital Market Outlook Forum" was held, featuring prominent experts discussing the new logic of wealth creation and the future of capital markets in the AI era. At the forum, Liu Gang, Managing Director of the Research Department and Chief Analyst of Overseas and Hong Kong Stock Strategy at CICC, delivered a keynote speech. He pointed out that the core theme for global and Hong Kong/A-share markets in 2026 is "following the direction of credit expansion," where excess liquidity chasing scarce return assets is intensifying structural divergence in the markets. Liu Gang stated that the fundamental logic driving the market remains unchanged, still propelled by three factors: valuation, growth trajectory, and capital flows; however, the role of capital has become increasingly critical, leading to intense sector rotation. Taking Hong Kong stocks as an example, the four quarters of 2025 exhibited a characteristic of "one style per quarter," with sectors like internet, new consumption, and innovative pharmaceuticals taking turns in the spotlight; missing the timing could lead to losses even in a bull market. The core reason lies in the liquidity surplus from "ample money"—large amounts of capital chase assets with high market consensus at different stages, quickly exhausting valuations after consensus forms, then moving to the next target, ultimately causing significant divergence within the stock market, CPI trends, and even the real estate market. This phenomenon is particularly typical in the real estate market: since the third quarter of 2025, the property market in first-tier cities has been slightly sluggish, yet transactions and prices for luxury homes have bucked the trend and risen. "Capital only flows where it wants to go, and the credit cycle is the core tool for identifying these directions," Liu Gang emphasized, noting that the credit cycle framework can explain market changes over the past three years. In 2024, the market focused on dividend-paying assets for stable returns; in 2025, an upward credit cycle drove the rise of high-growth sectors; and 2026 will present a landscape of "coexistence of strength and weakness," where the distribution of strong and weak credit cycles will determine the direction of capital flows. From a global perspective, the impact of credit expansion is ubiquitous. The significant gains in the US Magnificent Seven stocks are highly correlated with capital expenditure expectations; the US dollar's movement is linked to fiscal expansion expectations in Europe and the US; even under the "de-dollarization" narrative, some countries have increased their holdings of US Treasuries to new highs while simultaneously adding gold, essentially reflecting the parallel operation of two credit creation systems. Liu Gang believes that the performance of various assets revolves around the strength of the credit cycle, and this framework is the core logic for predicting market trends in 2026.
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