CKGSB Survey Shows Positive Investor Sentiment in China Amid COVID-19

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Cheung Kong Graduate School of Business (CKGSB)

Oct 13, 2020, 09:02 ET

BEIJING, Oct. 13, 2020 /PRNewswire/ -- "In Q3 2020, willingness to invest in stocks has increased significantly. About 58.5% believe that A-shares will rise in the next year. While the forecast for economic growth in China has been lowered, the overall sentiment for economic growth is high. Most investors believe that the impact of the U.S-China trade friction will be a positive factor on the Chinese economy in the long run."

The Cheung Kong Investor Sentiment Survey (CKISS), findings are gathered from questionnaires on investor sentiment collected in August 2020, newly released financial reports of listed companies, and the latest macro data of both Chinese and overseas capital markets.

Investor sentiment has improved significantly

About 74% of respondents believe that house prices will increase by 21 percentage points compared with the previous period.

Willingness to invest in stocks has increased significantly with 26.5% more people invested in stocks, an increase of 10% from the previous period. 59.4% more people were willing to invest in conservative assets such as banks' wealth investment.

Global capital markets are picking up

A-shares continued to rebound in the third quarter. The total return rates of the CSI 300 Index, SME Board, and ChiNext in the first 8 months of 2020 were 18%, 38%, and 52%, respectively. It is a period of time with the highest return on investment in the A-share market for years.

The epidemic has intensified the structural conflicts between China and the U.S

Our research finds that China and the U.S have extensive and deep links in economics, trade, and humanities. Once decoupled, not only will both economies be affected, but also the world economy. Therefore, the complete decoupling of China and the U.S is not in the national interest of anyone.

Increase investments in gold and A-share markets, and focusing on companies with import substitution capabilities in the high-tech sector

We make three predictions for investment. Investors should increase their asset allocation in safe-haven products such as gold as global uncertainty is still on the rise. Second, more investment should be made in companies with long-term value but whose assets are undervalued as China's economy is obviously recovering. Third, investors should pay attention to companies that have import substitution capabilities in the high-tech sector as the risk of China and the U.S decoupling in the high-tech field is increasing.

For more details, visit: https://english.ckgsb.edu.cn

SOURCE Cheung Kong Graduate School of Business (CKGSB)