Retail Investor Pessimistic and Institutional Investors Optimistic on China’s Capital Markets
May 18, 2021

(May 18, 2021, Beijing) Data collected in April 2021 for the first quarter of the Cheung Kong Investor Sentiment Survey (CKISS) found that retail investors showed pessimism towards China’s capital markets while institutional investors showed optimism – 61.3% of retail investors expected China’s A-share stock prices to rise in the next year, a decrease of 8.1% from the previous period, and 79.9% of institutional investors expected A-shares will rise, an increase of 18.3% from the previous period.

Respondents’ views on Hong Kong stocks also showed divergence. Retail investors are more pessimistic than the previous period, and institutional investors are more optimistic. However, compared with April 2020, both sides are more optimistic. Retail and institutional investors also showed divergent views on China’s housing market. Approximately 62.5% of the respondents in this period believe house prices will rise in the future (retail investors and financial industry are 57.6% and 78% respectively), a decrease of 7.3% from the previous period.

Investors showed optimism towards the expectations of the Chinese economy. Approximately 61.1% of the survey respondents believe that China’s future GDP growth rate can exceed 5%, an increase of 8% from the previous period. Respondents’ optimistic expectations for the economy seem to come from the confidence of global vaccination efforts and the recovery of the global economy in the second half of 2020. According to the survey findings, respondents’ pessimism mainly comes from the Biden administration’s tough policy towards China; 54% of the respondents believe that the US-China trade war will have long-term negative impacts on the Chinese economy.

The Cheung Kong Investor Sentiment Survey (CKISS) is a survey on investor sentiment and expectations in the capital market, co-sponsored by Cheung Kong Graduate School of Business’ (CKGSB) Center for Investment Research and the Business Scholars Program. It is led by Doctor Liu Jing, CKGSB Professor of Accounting and Finance and Associate Dean, and CKGSB researcher Chen Hongya.

The first survey was conducted in January 2018 and targeted over 60 outstanding entrepreneurs. In August 2018, the survey expanded its scope to 13 major Chinese cities and conducted on a quarterly basis with approximately 2,500 valid samples, including 1,900 samples from individual investors and 600 from institutional investors. The Center for Investment Research at CKGSB aims to offer a more comprehensive understanding of the capital markets in China and abroad using CKGSB’s unique theoretical & practical perspective.


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