China’s stocks remain unattractive to global investors, as its economy is struggling with a downturn and multiple negative signs amid Beijing’s strict “zero-COVID” control measures.
The South China Morning Post cited a survey from Montreal-based research firm BCA Research, reporting that most overseas investors are not interested in China’s stocks.
The poll pointed out that most investors see a significant downside in Chinese stocks, and now is not the time to buy. Moreover, the survey found that Chinese equities are falling behind their global peers for the next 12 to 18 months.
The survey showed that over 60% of respondents held a bearish view of the country’s property market. Moreover, it noted that most of the survey respondents agreed that the real estate crisis would not end in the next six months. And even with easing policy to support the market from Beijing, the measures seem not to help much so far.
Less than half of the respondents said that Chinese stocks are cheap and might make a good rebound over the next 12 to 18 months, while about 10% said stocks’ prices are near the bottom and investors should buy for now.
Most respondents raised their concerns about the weakening yuan, with 44% saying the currency will depreciate more by year-end.
This year, the Chinese yuan has depreciated 12% against the dollar.
In September, Hong Kong-listed Chinese stocks dropped sharply to record lows, down by 14%, and ranked as the worst performer among any major global equity benchmark.
Chinese stocks traded at 0.6 times book value for the month, the cheapest ever on the Hang Seng China Enterprises Index.
Out of 50 firms in the index, only three stocks held up, while the 47 remaining stocks dropped, with real estate developers and tech firms leading the race to the bottom.