Undoubtedly, China is the second-largest stock market in the world but China’s property sector has been going through a crisis for the past many months. The experts are predicting that the worst has not come yet. The worst of the crisis that has lobbed a shadow over the country’s economy is yet to come. The property crisis not only cast a pall over China’s economy but also led exodus of global funds from the stock market. Shockingly, 9 out of 15 respondents in an informal survey depicted that the worst of the crisis has not come yet. Is it really concerning? How much time it will take to retreat? Lots of questions have been prevailing in people’s minds. Let’s analyze the reports and understand the consequences of this property crisis. Keep reading this article. Swipe down.
How Badly Did Property Crisis Hit China?
An informal survey of analysts and money managers conveyed by Bloomberg News says that nine of 15 respondents based in mainland China and Hong Kong believe that the situation will be worse in the future than now. While the rest of the six respondents said housing woes are the biggest threat to equities for the last quarter of 2023. Notably, geopolitical tensions have become the second-biggest concern. Shockingly, Bloomberg Intelligence consists of property stocks at the lowest level in the history of the past 12 years, as a result, Sentiment has worsened during the liquidity, and weak housing demand intensified this week.
The head of investment strategy at KGI Asia Ltd. Kenny Wen who took part in the informal poll said, “We are in the worst of this cycle and we are not out of the woods yet. It’s going to take a long time for the current property crisis to be over. Before the property crisis is properly handled, it’s unlikely for the stock market sentiment to recover meaningfully.”
The informal survey depicts investors have become optimistic about the market trend. Data shows nearly 70 percent of the respondents think they should add stock positions both in Hong Kong and onshore. Investors may be staring at an added level of uncertainty after an indebted real estate conglomerate that sits at the center of the sector’s years-long crisis, China Evergrande Group, said that its billionaire chairman Hui Ka Yan is suspected of committing crimes. In addition, the former biggest developer of China Country Garden Holdings Co. also continues to struggle in an uphill battle to avert a public bond default.