Worst not over for Chinese property sector, JPMorgan investor survey shows

The worst of China’s property crisis is not yet over, a survey of Chinese and international investors carried out by JPMorgan has shown.

China’s property woes have continued to mount in recent weeks as major developers like Country Garden 2007.HK and state-backed Sino Ocean 3377.HK have teetered close to an Evergrande-style default.

“Unsurprisingly, most investors are bearish,” JPMorgan’s analysts said in a summary of the survey published on Friday.

It was the first time the investment bank had conducted the survey. It showed 55% of those who took part believed the market was “still at the trough” of its crisis, with only 26% of respondents of the view that the worst is now past.

There was no major discrepancy between Chinese and international investors’ views, they added.

Around 60% of respondents expected firms’ share prices to rise over the next three months, although only 16% said they were more likely to increase their positioning.

“Ineffective policy responses” meanwhile was viewed as the biggest concern, followed by a spillover into the banking system, a double dip in property sales, and a significant slump in home prices.

Respondents are still unconvinced that recent support measures will be enough to steady the situation. Just over 40% had a “neutral view” on whether these easing measures will boost property sales over the next 3-6 months.

Going forward, only 17% expect Beijing to provide very strong stimulus, while the majority, or 65%, expect regional or local governments to gradually increase support.
Source: Reuters (Reporting by Marc Jones; Editing by David Holmes)