Global investors remain bearish on the Chinese market due to worries about its property troubles, according to a Bank of America survey.
Most investors prefer to take a wait-and-see approach or seek opportunities elsewhere (62 percent), according to a survey of global and regional fund managers by Bank of America.
In the longer term, 74 percent of respondents expect a structural derating of Chinese equities. Just 19 percent forecast stronger growth over the next 12 months.
In Preservation Mode
«Investor interest towards risk assets in China is shockingly low,» according to the report authored by Bank of America strategists including Ritesh Samadhiya, citing a belief that Chinese households will stay put in «preservation mode» as a driver.
According to nearly one-third of global investors, China’s property sector is the most likely source of a systemic credit event, surpassing US commercial real estate. A banking crisis in China was also named as another event, though with low likelihood.
The survey was based on 254 respondents overseeing $691 billion in assets under management (AUM), including 140 in Asia with $310 billion in AUM.
