Wednesday, 29 April 2015

Chinese investors ‘among most optimistic in world’, survey suggests, even as economy slows

In Stock News 29/04/2015

Investors in mainland China are among the most optimistic in the world, according to a survey carried out by a financial asset management company, even as the country’s economy records its slowest growth in six years.
Ninety-four per cent of Chinese polled in the survey said they were confident of meeting their investment goals this year and 71 per cent expressed confidence that the prospects for the country’s main A-share market were rosy.
China ranked only behind India for optimism among investors in the survey carried out in 23 countries by the US investment company Franklin Templeton.
Five hundred people took part in the poll in China which was conducted between February 12 and March 2. Only six per cent of those people questioned had a negative outlook.
“The findings reflect the prevalent optimism following a stock market rally as well as confidence in China’s economic restructuring,” said Wang Yiwen, chief representative of Franklin Templeton Investments Beijing office.
China’s economy grew by 7 per cent in the first quarter of this year, the slowest growth rate since 2009.
The nation’s GDP expanded by 7.4 per cent in 2014, the slowest rate in 24 years and China’s Premier Li Keqiang said last month that the economy faced even more formidable difficulties in the coming year.
China’s A-share market, however, has been on a bull run, buoyed by the seemingly irrepressible optimism of investors.
The Shanghai Composite Index went up 16 per cent in the first quarter this year after surging 58 per cent in the second half of 2014.
Individual investors dominated transactions in the A-share market in the first quarter, according to the China Securities Regulatory Commission.
In the January-to-March period, 7.95 million stock trading accounts were opened, surging 433 per cent from a year ago.
Among them, 62 per cent of the accounts are owned by investors younger than 35 and 5.2 per cent by those older than 55, according to the securities watchdog.
“Many new investors only see the possibility of making money, but neglect the risk of making a loss,” the commission said on its website on Tuesday. “Please don’t blindly chase returns with irrational follow-up buying or speculate with borrowed money.”
The survey found that most mainland investors want to follow a “very aggressive” or “slightly aggressive” strategy in 2015.
Mainland investors are also among the most likely to believe their home capital markets offer the best equity and fixed-income investment opportunities not only for 2015 but over the next 10 years, according to the survey.
The highest ranked goals of mainland investors for 2015 include planning a vacation, investing in or starting a new business and buying a new home.
In more mature investment markets, the long-term goal of investing for retirement was ranked the highest priority, whereas in China only 3 per cent surveyed ranked it as a top concern.
More than half of Chinese investors evaluate their investment success in less than a year, making them among of the most short-sighted investors in the world, the survey said.
The survey polled 11,508 people in 23 countries and territories. Those taking part in mainland China had average investible assets of 1.2 million yuan (HK$1.5 million).

Source: South China Morning Post