November 30, 2017 / 5:01 AM / a year ago

POLL-China funds boost equity exposure to 8-month high, cut bonds

* For accompanying table, click on

SHANGHAI, Nov 30 (Reuters) - Chinese fund managers boosted their suggested equity exposure for the next three months to the highest in eight months, but most will cut exposure heading into the year-end as they anticipate a price correction even as they remain optimistic in the medium term, a monthly Reuters poll showed.

The fund managers raised their suggested equity allocations to 79.4 percent from 78.8 percent a month earlier, according to a poll of eight China-based fund managers conducted this week.

The fund managers have cut their suggested bond allocations for the coming three months to 5.6 percent from 8.1 percent last month.

They have boosted recommended cash allocations to 15 percent for the next three months, from 13.1 percent the previous month.

“Institutional investors’ profit-taking ahead of the year-end and intervention by regulators in the major stock indexes could be key factors for fluctuations in the market,” a South China-based fund manager pointed out.

The market is underpinned by expectations of a relatively robust industry recovery and corporate earnings growth in 2018, he added.

The fund managers surveyed held mixed views on asset allocations for the next month, with four suggesting a cut and only one signalling an increase, while three recommended the same level of equity exposure.

According to the poll, average recommended allocations to financial shares jumped to a three-year high, while those to auto, real estate, transport and infrastructure stocks were lowered.

Average recommended allocations to financial shares were raised to 21.4 percent from 15 percent last month, while those to auto stocks were cut to 2.9 percent from 4.8 percent, according to the poll.

Stocks that had stellar gains this year have been under pressure recently amid stepped-up financial regulations, but firms with solid fundamentals and growth will continue to be preferred, a Shanghai-based fund manager said.

China’s central bank issued in mid-November sweeping guidelines to tighten rules on asset management business, the latest and most comprehensive set of rules proposed by financial regulators to fend off shadow banking risks that could spread across different asset classes. ——————————————————————————————— 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, Luoyan Liu and John Ruwitch; Editing by Jacqueline Wong)

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