(For accompanying table, click on )
SHANGHAI, May 30 (Reuters) - Chinese fund managers reduced their suggested equity allocation for the next three months to a 21-month low amid fears that the cooling property market will increase risks to the economy and financial system, according to a Reuters poll.
Average recommended stock weightings in May fell to 76.3 percent from 77.5 percent a month earlier, according to a poll of nine China-based fund managers conducted this week.
“The biggest risk comes from the property industry; investment in property construction is falling, receivables are rising, which may lead to a sharp increase in defaults by property trust projects,” said a Shanghai-based fund manager. Such a view was echoed by four other fund managers surveyed.
Funds more than doubled bond allocations from 5.1 percent to 10.4 percent, the highest level in one and a half years. Those surveyed see bonds as a short-term safe haven, as confidence toward equities weakens.
Allocations to cash fell to 13.2 percent from 17.4 percent.
“I think the most significant opportunities will come from a possible loosening of monetary policy. You can see that treasury bond futures are rising, while bond interest is falling, which reflects the expectation,” added another respondent who declined to be identified.
This month, suggested allocations to auto, metals and energy stocks have risen slightly, while recommended weightings of financial stocks remained steady and allocations to consumer and electronics shares have fallen.
The average recommended allocation for auto stocks rose to 7.2 percent from 5.6 percent last month, while metals rose to 3.3 percent from 2.5 percent in the same period. For consumer stocks, the average recommended allocation fell to 19.2 percent from 24.9 percent last month. --------------------------------------------------------------- To see other polls in this series, click on:
GB/ASSET - Reuters Britain-based asset allocation survey
US/ASSET - Reuters U.S.-based asset allocation survey
JP/ASSET - Reuters Japan-based asset allocation survey
EUR/ASSET - Reuters Continental Europe-based asset allocation survey (Reporting by David Lin and Engen Tham; Editing by Kim Coghill)