Retail savings and investments in China are set to post their worst year ever since the 2008 financial crisis, according to data analytics firm GlobalData, including a 20 percent decline in equities.
Tumbling markets are hitting both direct equity holdings and equity funds, GlobalData said, while deposit growth will also be modest as households dip into savings in the absence of sufficient state support. The broader savings and investment market in China is expected to grow 3.3 percent in 2020 – a downward revision from the firm’s previous 4.7 percent estimate in January.
In this gloomy environment, GlobalData highlighted is bonds for its stable income and technology investments, «the most vibrant wealth generator for China» which will continue to see its share grow especially in the high net worth (HNW) market.
Second Wave
GlobalData stresses that its current forecast could be tested for further revision as it does not account for a potential second wave of coronavirus infections later in the year once restrictions are fully lifted.
«The disruption to global demand will weigh heavily on the wealth market in China, even as it gets back to work,» said Ravi Sharma, GlobalData’s senior banking and payments analyst. «Wealth managers should be aware that many of their affluent and HNW clients will have their hands full dealing with the negative impact of the crisis on their businesses, in addition to any losses to their investment portfolio.»
