CKGSB Investor Sentiment Remain Pessimistic on China’s Capital Markets
May 12, 2022

Investors remain pessimistic on China’s A-shares stocks and real estate as investment in precious metals such as gold increases by 10.2%, according to the new quarterly Investor Sentiment survey from Cheung Kong Graduate School of Business (CKGSB). The survey, which polled 2,500 investors from 13 major cities in China found that about 60.9% of investors expect A-shares stocks to rise and only 55.9% of the investors polled believed house prices in first- and second-tier cities will rise in the next 12 months, down from 69.4% at the end of 2020. Respondents remain consistent on expectations for China’s GDP growth at 5.4% and inflation at 2.7%.

Financial practitioners felt more optimistic than retail investors with 79.7% of financial investors expecting China’s A-shares to rise compared to 54.9% of retail investors. Investors’ expectations for Hong Kong stocks also diverged with 63.7% of financial investors expecting an increase compared to 41.2% of retail investors. 

The proportion of investors willing to invest in bank wealth management and stable funds increased to 83.4%, up from 75.9% the previous quarter. Only 37% of people polled were willing to invest in stocks and stock funds, a decrease from 45.2% in the previous period. 

The Q1 survey findings are based on data collected in March 2022, just before the negative impact from China’s strict COVID-19 measures was fully apparent.  According to 68% of investors surveyed, the pandemic will be the most significant factor to future investments. 

There are eight sources of uncertainty for investors to contend with: 

  • Spread of Omicron
  • Geopolitical instability, stemming from the deterioration in relations between US and China especially in light of the Russia-Ukraine war 
  • China’s tough deleveraging policies for the real estate industry
  • China’s deleveraging campaign for the whole economy
  • Antitrust measures on tech companies like Ant Financial, Didi, Meituan, Tencent, Alibaba.
  • China’s new regulations on the education tutoring sector
  • Common prosperity drive
  • Global inflation

“Omicron, geopolitical instability and global inflation are challenges unprecedented in the 40 years since reform and opening up, surpassing the Asian financial crisis in 1998 or the subprime mortgage crisis in 2008. In order to reverse the pessimism in the market, dramatic domestic policy adjustments need to be made. China is a very large economy, so domestic factors are often more important,” says Professor of Accounting and Finance at CKGSB, who leads the quarterly survey. 

About the Cheung Kong Graduate School of Business Investor Sentiment Survey (CKISS)

One of the few ongoing quarterly surveys on China’s investor sentiment and capital market expectations. It is based on a large sample of 2,500 investors from 13 major cities in China. The Q1 survey findings was based on data collected in March 2022, as well as financial reports of A-share listed companies collected in the first quarter of 2022, and other latest domestic and foreign capital market and macro data. The report is divided into two parts: the first part uses questionnaires to understand investors’ views on the future trend of asset prices such as the stock market and real estate, as well as their expectations on macro indicators such as economic growth; the second part combines macroeconomics and data from listed companies which are used to analyse the reasons for the investor sentiment. Running since January 2018, the survey is sponsored by Cheung Kong Graduate School of Business’ (CKGSB) Center for Investment Research and led by Doctor Liu Jing, CKGSB Professor of Accounting and Finance, and CKGSB researcher Chen Hongya. 

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About Cheung Kong Graduate School of Business (CKGSB)

Established in Beijing in November 2002 with support from the Li Ka Shing Foundation, CKGSB is China’s first faculty-governed and independent business school. CKGSB has more than 40 full-time professors, many of whom previously held tenured faculty positions at leading business schools such as Wharton and Yale. Their research has provided the basis for more than 500 case studies of both China-specific and global issues. CKGSB also stands apart for its unmatched alumni network. More than half of CKGSB’s 18,000+ alumni are at the CEO or Chairman level and, collectively, lead one fifth of China’s 100 most valuable brands.

Headquartered in Beijing, CKGSB is also located in Shanghai, Shenzhen, New York, Hong Kong and London. The school offers degree and non-degree programs: MBA, Finance MBA, Executive MBA, Business Scholars Program (DBA), and Executive Education programs. 

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