Investor confidence rose sharply in last quarter

Shanghai's investor confidence rose sharply in the fourth quarter of 2024 while consumer confidence fell slightly, according to a latest survey.

The Shanghai University of Finance and Economics' quarterly Index of Consumer Sentiment in Shanghai Index dipped 1.6 points from the third quarter of 2024 to 100.8 points, extending the quarter-on-quarter declines but at a slower pace. It was 0.8 points lower than a year earlier.

The university's Index of Investor Sentiment rose to 106.57 points in October-December, a 10.97-points increase compared with the previous quarter and 8.42 points higher than the same period in the previous year, returning to the optimistic territory.

For both indexes, a reading above 100 signifies optimism while one below 100 indicates pessimism.

Xu Guoxiang, director of the university's Applied Statistics Research Center, said that the recent intensive introduction of several macro-policies in China has conveyed a positive signal of growth stabilization and boosted investors' confidence in the future development of the market.

The indicator for the consumer evaluation of Shanghai's economic state also returned to the optimistic region in this quarter, which was 103.15 points, with a 7.49 increase from the third quarter and also a mild increase compared to last year.

"International capital's attention to the Chinese market has been rising because of the gradual recovery of the global economy and the Federal Reserve's monetary policy shift, which has a positive influence on Shanghai's investor investment climate index," said Xu.

He was speaking along with Professor Wu Chunjie and Chang Ning.

The indicator of purchase intentions rose 9.9 points from the previous quarter in October-December. Among them, the index of home-buying intentions rose 7.4 in the quarter, and the intentions to buy cars and durables also saw an increase of 5.8 points in the quarter, showing a relatively steady trend.

Despite the city's consumer confidence still slipping in the fourth quarter, some slowdown was seen in the declines, Xu noted.

"Although facing pressure, China's economic resilience, potential, vitality, as well as the policies to deal with negative impacts were paying off, to some extent stabilizing the consumer confidence."

In general, consumers are holding better expectations for future economic recovery compared with their assessment of the current economy, the indexes showed.

The Index of Consumer Expectation stayed in optimistic territory, compared with the previous quarter, dipping 1.8 points to 100.2 points.

Xu suggested the city should make further efforts to expand domestic demand, boost consumption, and promote innovation in high-end manufacturing to add new momentum to economic growth.

He also called for the implementation of large-scale skills training for the promotion of employment, as income and employment stability were fundamental to boosting consumption.