Official Media: Analysts Expect Social Security Funds and Other Institutions Will Increase Market Entry Ratio, Helping to Stabilize Short-term Market Volatility

Mainland official media “China Securities Journal” quoted market insiders predicting that future reforms in the capital market will focus on three areas: promoting the continuous entry of medium- and long-term funds, enhancing the investment value of listed companies, and coordinated regulation across multiple departments. This will accelerate the development of a healthy ecosystem for investment and financing. As various foundational systems are further improved and optimized, the stability of the capital market will become more solid, providing strong support for the long-term stable operation of the A-share market.

CICC Research Department’s Chief Domestic Strategy Analyst Li Qiuesuo stated that promoting medium- and long-term funds entering the market is a key part of building a stable market mechanism. These include long-term funds such as pensions, insurance funds, and sovereign wealth funds, which can become drivers of steady long-term market growth. This is important for smoothing short-term market fluctuations and playing the roles of stabilizer and ballast in the capital market.

Li Qiuesuo believes that to encourage medium- and long-term funds to “willingly come in,” top-level policy design must be further improved, and the investment environment for long-term funds optimized. For long-term funds like insurance and pensions, restrictions on equity investment ratios and scope should be further relaxed, and support provided for their long-term strategic shareholding.

Yang Chao, Chief Strategy Analyst at China Galaxy Securities, believes that the pattern of stable and improving medium- and long-term liquidity remains unchanged. Relevant departments will continue to promote the entry of medium- and long-term funds, with steady expansion of insurance funds, social security funds, enterprise annuities, and pension funds. Increasing their market share and investment scale will help improve the market’s capital structure and smooth short-term fluctuations.

Guiding listed companies to increase dividend payouts

Luo Zhiheng, Chief Economist and Director of the Research Institute at Yuekai Securities, suggested that relevant departments should promote listed companies to proactively increase investor returns, categorically guide companies to raise dividend levels, encourage mature enterprises with stable cash flows to increase dividends, and guide companies in rapid development or with significant capital arrangements to reasonably determine dividend levels, balancing long-term development and shareholder returns.

Tian Lihui, Professor of Finance at Nankai University, recommended that while improving the investability of listed companies, efforts should be made to enrich the broad-based index and ETF product systems to better meet investors’ diverse investment needs. Expanding the product system, especially increasing passive and index-based products, will provide low-threshold, low-volatility investment options.