International investors are losing confidence in Chinese stocks, suggests the latest fund manager survey conducted by Bank of America (BoA).
The study found that just 5% of regional fund managers are overweight on Chinese equities, showing a sharp decline from 27% in April and 39% in March.
The main reason cited for the loss of confidence is the slowdown in the Chinese economy at a time when many investors anticipated an economic boost when China entered a post-Covid reopening phase.
The survey also showed a decline in confidence in Chinese equities in the long term. Just 20% of investors expect a strengthening of the Chinese economy in the next 12 months, compared to 49% in May and 79% in April.
“The fragile economic recovery in China has underwhelmed one and all. Market expectations in China are tepid as well, although not outright bearish,” stated the BoA report.
The survey canvassed 166 investors who collectively manage around US$329 billion of assets.
The BoA survey findings come days after data from consulting firm Z-Ben Advisors showed that newly launched Chinese mutual funds are struggling to raise funds.
Newly launched mutual funds raised RMB 432.1 billion (US$ 61 billion) in the first five months of 2023, the lowest sales figures since 2019.
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