Chinese institutional investors turning bullish, betting worst is over for domestic stock markets, JPMorgan survey says
73 per cent of institutional investors surveyed expect mainland Chinese stock markets will reverse their downward spiral over next 12 months.
Bullish sentiment is building for China’s battered stock markets.
A survey of Chinese institutional investors by JPMorgan Asset Management found that 73 per cent expect mainland Chinese stock markets will reverse their downward spiral, and 33 per cent say shares will rise between 5 per cent and 15 per cent in the next 12 months.
China’s Shanghai Composite Index is down 18 per cent for the year, making it the worst-performing major exchange in the world.
But institutional investors see a number of factors signalling that the worst may be over: foreign fund inflows have increased. Listed companies are posting record buy-backs. Earnings and dividend yields are rising.
“With trade war uncertainty hanging over the market and a government deleveraging campaign weighing on domestic growth, we were a little surprised to find Chinese investment professionals are actually fairly bullish on their home market equities over the next year,” said Hui Tai, a strategist at JPMorgan Asset. “These results suggest onshore investors may be taking a more favourable view on domestic equities, with sentiment improving.”