Global corporates pivot towards selective capital allocation in 2026 amid resilient growth

• Corporate balance sheets remain robust, with more debt headroom and higher liquidity buffers.
  
• USD 2.6 trillion in untapped working capital globally represents a significant internal funding source.
  
• AI infrastructure and China’s outbound momentum emerge as primary drivers of selective investment.
  

London, Singapore – Standard Chartered today published its Capital Structure & Rating Advisory (CSRA) Annual Insights 2026 – “Resilient Growth, Selective Investment”, highlighting a shift by global corporates towards more targeted and disciplined capital allocation even as the economic growth outlook remains resilient.

Analysing 1,080 listed companies across 19 sectors, the report finds that corporate balance sheets are strong heading into 2026, despite the gradual easing of fiscal and monetary policy support. Leverage has improved marginally, providing corporates with an average 8 per cent increase in debt headroom year-on-year, while liquidity buffers remain elevated, having risen by 6 per cent.

This financial resilience gives companies the capacity to invest, but capital deployment is becoming increasingly selective. Many sectors have yet to return to pre-pandemic capital expenditure levels, as higher return thresholds, persistent uncertainty and a continued focus on shareholder distributions — particularly share buybacks — temper broad-based investment recovery.

The macroeconomic backdrop remains supportive, with stable global growth expectations and improved country risk amid more predictable macroeconomic conditions, even as policy support fades. Corporates are prioritising disciplined financial policy and balance sheet resilience alongside growth ambitions.

Several themes will shape corporate decision-making in 2026:

Working capital optimisation: An estimated USD 2.6 trillion is still tied up in working capital globally, representing a massive and low-risk source of internal funding. The cash conversion cycle remains a significant, underutilised source of value creation.

AI and infrastructure investment: The accelerating adoption of artificial intelligence and investments in technology infrastructure, such as data centres, are driving financing needs and investment opportunities, while also placing increasing strain on power and grid infrastructure.

China’s outbound momentum: China-based corporates with a global footprint are seeing improved profitability, with overseas exposure contributing positively to performance across nine sectors, despite ongoing geopolitical and structural challenges.

Shoaib Yaqub, Managing Director and Global Head of Capital Structure & Rating Advisory at Standard Chartered, said, “Despite starting 2026 with stronger balance sheets and greater financial flexibility, corporates are likely to remain disciplined around capital deployment. While the capacity to invest exists, decision-making is increasingly selective, with a clear focus on maintaining balance-sheet resilience, preserving or even increasing shareholder returns, and financial optionality alongside growth objectives.”

The CSRA Annual Insights 2026 underscores that as policy support continues to wane and risk dynamics evolve, the ability to prioritise investment decisions within a disciplined financial framework will remain a central theme for global corporates in the year ahead.

The full CSRA Annual Insights 2026 report is available at:
https://www.sc.com/en/corporate-investment-banking/capital-structure-rating-advisory/csra-outlook-2026

For further information please contact:

Alvina Neo
Standard Chartered

CSRA Annual Insights 2026 report
The CSRA Annual Insights 2026 report is based data from 1,080 companies across 19 corporate sectors, drawn from the S&P Global 1200 Index and Hang Seng Index. The report analyses corporate balance sheets, leverage trends, liquidity positions, capital allocation strategies, sector dynamics and structural investment themes to provide insights into how corporates are positioning for growth in 2026.