In July, 2.66 million new A-share accounts were opened, an increase of 35%. Why is it said that this data has significant "value"?

In July, the new account opening data for A-shares was released, showing that the market pullback has not significantly dampened investors' enthusiasm for entering the market. According to the data, approximately 2.66 million new accounts were opened in July, an increase of 35% year-on-year but a decrease of 7.3% month-on-month. By the end of July, the total number of new accounts opened in A-shares in 2026 reached about 22.82 million. When viewed against previous monthly new account openings, the number for July continues to reflect a relatively high entry temperature for this year. This data is noteworthy because July was not a month characterized by wealth generation effects. The Shanghai Composite Index fell by 6.40% in July, the Shenzhen Component Index dropped by 16.21%, and the ChiNext Index and the STAR Market 50 both experienced significant declines of 23% and 25.9%, respectively. The tech growth sector, which led the market in the first half of the year, underwent a concentrated pullback, while heavyweight blue chips were relatively resilient. The performance of large and small indices was markedly divergent, and trading volume in both markets clearly retreated from previous highs. In this market context, the figure of 2.66 million accounts is highly "valuable." It surpassed the 2.52 million accounts opened in February and the 2.49 million in April, with little difference from the account levels in May and June, and was higher than that of any of the nine months in 2025. In other words, while the number of new accounts in July shows a month-on-month decline that signals a cooling off of exuberance for chasing high prices, the year-on-year increase and continued high absolute scale indicate that the monthly adjustments have not interrupted the rhythm of external capital entering the market. Is there a phase of decoupling between account openings and wealth effect? In recent years, the number of new A-share accounts has typically been highly synchronized with wealth generation effects. When the market rises, trading volume increases, and discussions on social media heat up, it tends to drive a rapid increase in new account openings; conversely, when the index falls and wealth effects diminish, the enthusiasm for opening accounts also cools off. However, since March this year, this empirical relationship has started to show signs of loosening. In March, A-shares exhibited a trend of volatility and decline, and wealth effects visibly shrank, yet new account openings increased against the trend to about 4.6 million accounts, nearly doubling compared to February. In April, the market rebounded strongly, with tech stocks gaining significantly and wealth effects recovering, yet new account openings fell to 2.49 million accounts. Changes in July further reinforced this sense of anomaly. Despite significant declines in tech stocks, the ChiNext Index recorded its second-largest monthly drop since its inception, and the STAR Market 50's decline approached 26%, yet new account openings remained at a relatively high level for the year. The account opening data is no longer just a simple reflection of the monthly index fluctuations but appears to reflect a comprehensive response to mid- to long-term market expectations, demands for asset allocation, and the education of investors entering the market previously. Why did account openings remain high during a month of significant declines? Why did the market drop not extinguish enthusiasm for opening accounts? Analysts believe two core logic points lie behind this. First, the market's performance in the first half of the year has completed a broad phase of market education, causing many previously hesitant groups to view the stock market as a long-term allocation option; thus, they are unlikely to abandon their entry plans immediately due to a single months steep decline. Second, many off-market investors view this recent sharp drop as an opportunity to "buy the dip. Some new accounts are not immediately loading up on individual stocks but rather are preparing accounts to gradually enter the market through ETFs. This assessment aligns with the performance of the ETF market in July. Data indicates that July saw a net inflow of 477.836 billion yuan into equity ETFs, with broad-based index ETFs being the absolute majority of these funds. From June 25 to July 30, the ChiNext Index underwent a periodic pullback of 25.8%, while during the same period, tech-focused ETFs accumulated a net subscription of about 165.5 billion yuan; during 15 trading days of decline, there were net subscriptions recorded on 13 days, with a total net subscription of around 115.9 billion yuan on down days. The persistent influx of incremental buying demonstrates that this round of adjustments does not indicate a loss of the market's capacity to absorb but is rather a product of the unwinding of earlier crowded trades alongside the counter-cyclical absorption of funds in ETFs. Of course, the month-on-month figure has decreased from the June peak, indicating that the significant drop did indeed suppress some chasing high prices sentiment, but the momentum for entering the market that had built up previously has not been interrupted by a single month's adjustments. Retail investors showcased prominent buying more as prices fall behavior as small single trades amounted to a net purchase of 724.2 billion yuan. Apart from account opening data, the flow of small single trades offers an alternative perspective for observation. Market participants often classify trades of 40,000 yuan or less as small single trades to observe the trading behaviors and sentiment changes of ordinary investors. Such trades are numerous and widely distributed, largely corresponding to the daily buys and sells by individual investors. While small single trades do not directly equal retail investor flows, split trades and algorithmic trading might introduce volatility, yet directional changes remain a key thermometer for observing the risk preferences of everyday investors. In July, data indicated that the net purchase of small single trades throughout the month reached 724.2 billion yuan. Despite the significant index pullback and pressure on the tech growth theme, small single trades continued to show net buying, resonating with the high number of new account openings. This suggests that ordinary investors are not withdrawing en masse; rather, some funds have continued to enter and absorb during the adjustments. Brokerage assessments: August repair is anticipated. For the market outlook, several leading brokerages have provided optimistic forecasts. CMSC believes that A-shares will gain momentum to advance in August supported by policy, industrial trends, and micro liquidity. On the policy front, relevant measures to stabilize the market and institutional investors entering via ETFs help stabilize market expectations; on the industrial side, earnings reports from overseas tech leaders show ongoing high capital expenditures by cloud vendors, with AI infrastructure construction accelerating; and on the liquidity front, the deleveraging of A-shares and overseas markets concerning tech stocks may have reached a conclusion, making the rebound layout window worth watching. Huatai believes that the current stage is closer to the initial signs of a trading bottom. Their judgment is supported by ample adjustment space for main lines, the clearance of certain leveraged trading funds in domestic and overseas markets, and the fact that the market has yet to form major incremental contributions. They indicate that a key window for a trend reversal may appear in late August, with mid-year reports, Nvidia's earnings release, and redemption pressures during the rebound process collectively influencing whether technology can enter a new major upward phase. CITIC SEC believes that the probability of widespread recovery in August is increasing, but it is not a simple oversold rebound and that the negative narrative for non-AI sectors is marginally improving. Nomura Orient assesses that after the rapid unwinding of crowding in July, the tech mainstay has reached a bottom zone, and after the market stabilizes, investors can observe allocation opportunities again. Nomura Orient suggests that following the rapid unwinding of crowdedness in July, the tech mainstay is now in a bottom range, recommending that investors wait for market stabilization before reallocation. Considering the current structural market trends reflecting more fundamental divergence, they expect that after the shift in market sentiment and chip distribution, tech stocks will continue to outperform consumer and domestic demand stocks based on fundamental expectations. This article is reproduced from "Cailian Press," edited by GMTEight: Jiang Yuanhua.