CKGSB 2020 Q4 Investor Sentiment Survey Reveals Optimistic Outlook Amid China's COVID-19 Recovery

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Cheung Kong Graduate School of Business (CKGSB)

Jan 15, 2021, 00:53 ET

BEIJING, Jan. 15, 2021 /PRNewswire/ -- Positive investor sentiment across the board underscores China's undeniable success in controlling the spread of Covid-19. The latest Cheung Kong Graduate School of Business Investor Sentiment Survey (CKISS) 2020 Q4 data reflects survey responses from 2,500 individual and institutional investors, who feel more optimistic towards China's financial markets including China's real estate and the US-China trade war. Respondents were more optimistic about A-shares than in the previous quarter, with 67.5% expecting increases to A-share prices, an increase of 9 percentage points (pp) compared to the previous quarter.

Investor sentiment is also more optimistic towards Hong Kong share prices with 50% of respondents expected a rise, representing an increase of 15pp compared to the previous quarter. This optimism stems from confidence in the fundamental factors that underlay growth, and the controllability of risks. In terms of fundamental factors, about 53% of respondents believe that China's annual GDP growth will exceed 5% in the future, an 8.2pp increase over the previous quarter. Respondents also showed a positive outlook towards the future performance of A-share listed companies. Roughly 45% of respondents expected A-shares to have a future annual average net profit growth of over 10%, which is up 7.7pp compared to the previous quarter. In terms of risk, 64% of respondents believe that A-share prices are reasonable; this is down 2.2pp compared to the last quarter, but still high by historical standards. Respondents also felt that real estate prices in China's first and second-tier cities to be reasonable, this is nearly 20pp higher than two years earlier. Investors also increasingly downplayed the negative impact of the US-China trade war, with approximately 46.7% of respondents believing that the trade war would benefit China in the long-term, this figure has almost doubled compared to two years earlier.

About The Cheung Kong Investor Sentiment Survey (CKISS)

The Cheung Kong Investor Sentiment Survey is a quarterly report on investor sentiment and expectations of China's capital markets overseen by CKGSB Professor of Accounting and Finance Liu Jing. The survey began in January 2018 and is based on 2,500 samples conducted in 13 major Chinese cities. The findings for 2020 Q4 were gathered from investor sentiment questionnaires collected during December 2020, A-share listed companies' financial statements for the third quarter of 2020, and the latest macro data from both Chinese and overseas capital markets.

SOURCE Cheung Kong Graduate School of Business (CKGSB)