Investor appetite broadly resilient, survey shows

Investor sentiment toward China's capital markets remained broadly resilient toward the end of 2025, characterized by a clear divergence between rising optimism among retail investors and a shift toward prudence among financial professionals, according to a survey by the Cheung Kong Graduate School of Business.

The latest investor sentiment survey released on Wednesday found that 62.3 percent of respondents expected China's A-share market to rise, largely unchanged from the previous quarter. However, beneath the headline figure, views diverged, reflecting different assessments of valuation, risk and market sustainability.

Retail investors became more upbeat, with 64.2 percent expecting gains, while confidence among financial-sector respondents adjusted to 59.8 percent, highlighting a more cautious stance among professional investors.

"The overall mood is stable, but the drivers of confidence are evolving," said Liu Jing, professor of accounting and finance at CKGSB, who led the survey. "Retail investors tend to respond more to market momentum, while professionals are more keenly focused on valuation metrics and the sustainability of returns."

The quarterly survey, conducted in December involving around 1,300 investors and 800 financial professionals, broadly mirrors market performance over the past year. After solid gains in the first three quarters of 2025, China's stock markets entered a period of consolidation.

CKGSB's analysis suggests that this caution is closely linked to valuation dynamics. The report estimates that overall A-share market valuation rose more than 20 percent in 2025, while corporate earnings growth remained broadly flat, indicating that the rally was driven largely by valuation expansion rather than a broad-based improvement in fundamentals.

"After a valuation-led rally, it is natural for professional investors to reassess return expectations," Liu noted. "This reflects healthy prudence, rather than a loss of confidence."

Beyond equities, the survey also highlighted rising interest in gold amid intensifying global uncertainty. CKGSB noted that gold prices surged in 2025, underscoring the appeal of safe-haven assets amid geopolitical tensions and policy uncertainty.

"When uncertainty rises, demand for gold can increase quickly, while supply remains relatively stable," Liu said. "That imbalance can amplify price movements."

Liu described the current gold rally as part of a longer-term structural cycle, shaped by a more complex and less predictable global environment.

The survey also highlighted that sentiment toward the property market remained uniformly cautious across respondent groups. Fewer than 40 percent of respondents expected housing prices to rise, a decline of 9.7 percentage points from September. Willingness to invest in real estate stayed weak, despite a modest improvement from the previous quarter.

Liu cautioned that the rising global uncertainty in 2026, ranging from shifting US trade policies to financial risks emerging in Japan, could further test investor confidence, underscoring the growing role of domestic demand in anchoring investor expectations.

The Central Economic Work Conference in December has identified expanding domestic demand as the top priority of China's economic policy in 2026, with a focus on promoting a better match between supply and demand.

China is stepping up efforts to boost domestic demand by placing greater emphasis on raising people's incomes, expanding consumption capacity and fostering stronger internal economic circulation.