China Investors Say Worst Yet To Come For Property

China's property sector has yet to see the worst of the crisis that has cast a pall over the nation's economy and helped drive an exodus of global funds from the world's second-largest stock market.

The results reflect the malaise that is affecting China's real-estate industry. Policymakers are reluctant to take more aggressive measures of stimulus, for fear they will increase long-term risks. We are still in the midst of this cycle. Kenny Wen is the head of investment strategy for KGI Asia Ltd. He participated in an informal poll. Investors could be facing an additional level of uncertainty, after China Evergrande Group - a heavily indebted conglomerate that is at the heart of the real estate sector's long-running crisis - announced Thursday that Hui Ka Yan, its billionaire chairman, was suspected of crimes. The benchmark CSI 300 Index is down 4.7% in 2023. This marks the start of an unprecedented third consecutive year of losses. According to the median forecast, the CSI 300 will end the year at 4100. This would indicate a gain of approximately 11% over the last close. In the informal survey, more than half the respondents stated that they believe equities are the best option for investment at this time. They prefer equities to cash or commodities. In September, overseas investors sold mainland China shares worth about $5 billion on a net-basis via trading links to Hong Kong. Foreign funds' continued selling has led to bets on the end of the worst outflows. Fewer than a third (33%) of respondents expected that fund flows through the Stock Connect program would be negative for the entire year.

Zhu Houzhong said that 'Yuan Assets, particularly A Shares, are very cheap at the moment and many pockets of market are oversold'. Zhu Houzhong is a fund manager with Shanghai Youpu Investment Co., who participated in the informal survey.