Huafu Securities Macro Chief Chen Xing: A relatively ample liquidity environment may drive the stock market to reach new highs again this year

At the Huafu Securities 2026 Spring Economic and Investment Strategy Conference, Chen Xing, Assistant Director of Huafu Securities Research Institute and Chief Macro Analyst, predicted that the stock market still has room to rise this year. The stock market’s movements are sometimes not synchronized with economic growth, and liquidity is a major driver of market changes. Although nominal GDP growth is still at a low level, while residents’ balance sheets are being dragged down by real estate and showing limited improvement, the expansion rate of financial institutions’ balance sheets remains acceptable. The divergence between the two has provided ample liquidity resources for the equity market. As deposits from previous years mature gradually, the relatively low interest rates may trigger reallocation of residents’ assets. Even if the proportion is not high, the large volume of maturing deposits can still mobilize significant funds. Chen Xing expects that the relatively ample liquidity environment, combined with a bottoming and rebound in profit growth, could drive the stock market to reach new highs again within the year. (21st Century Business Herald)