The ongoing rally in Chinese stocks will do little to boost growth in the mainland’s economy, as equity investments account for a small portion of total household assets, Nomura Holdings said.
In a report on Wednesday, Lu Ting, the Japanese brokerage’s chief China economist, said Chinese households parked the majority of their wealth in the struggling property market. Stock holdings accounted for 1.3 per cent of total household assets, while the proportion for properties was 60 per cent, the report said, citing data published by China’s central bank in 2019.
“Chinese households’ assets are still dominated by property, implying a limited wealth effect from rising stock prices,” Lu said.
Investors who were counting on a bullish stock market to help revive the Chinese economy – particularly consumer spending after some key July economic data suggested a broad-based slowdown – were likely to be disappointed, Lu said. In an…
