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Survey finds Chinese prefer investing in stocks and funds
(Shanghai Daily)
Updated: 2007-06-21 08:37 Chinese residents favor stock and fund investment, whose attraction surpassed savings for the first time, amid a booming stock market, the central bank found in survey.
Consumption willingness also dropped to a record low, the survey also revealed. Confidence by bankers and entrepreneurs dropped on concerns that the economy will overheat, according to two other surveys by the People's Bank of China. About 40.2 percent of 20,000 respondents surveyed said they opt to "buy stocks and funds" when asked "What's your favorite assets to hold," setting a record high for the option, the PBOC said on its Website yesterday, quoting a survey made in 50 cities in late May. It is the first time for equities investment to surpass savings in Chinese residents' option of holding assets. The attraction of savings has dropped for three quarters to 26.3 percent to a six-year low. Residents are also holding tight to their pockets amid the booming stock market as only 19.5 percent of respondents said they are willing to spend more, setting a record low. Their willingness to buy property, autos and other big-item goods also fell, the survey said. "The drop, in contrast to the enthusiasm for equity investment, indicated that some residents choose to hold onto their pockets (to save capital for equity investment) as a result of the booming stock market," the central bank said.
The central bank has already increased interest rates, reserve requirement ratios and tripled the stamp duty on share trading to curb speculation. The booming stock market, rising inflation and investment have led to expectation of more tightening measures to cool the economy. In a survey of 5,635 entrepreneurs in the second quarter, the entrepreneurs' confidence index dropped to a two-year low to 83.4 percent on worries of overheating appearing in the economy. The bankers' confidence index also fell to a record low as 67.4 percent of bankers who participated in the survey said they thought the economy is relatively overheated. About 57.8 percent of bankers said they expected the economy to be overheated in the next quarter. (For more biz stories, please visit Industries)
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