More than a third (33.9%) of Chinese households plan to invest more via wealth management products, down 0.6% from a previous survey of the fourth quarter of 2016, according to the latest quarterly survey by the People's Bank of China.
The survey also revealed that wealth management schemes from banks, securities and also insurance companies are the top investment choice for retail investors in China, with 49.2% of respondents investing in them, up from 48.9% in the final quarter of last year. Following were fund trust products, with 20.5%, as compared to 19.8% in the previous survey, and stocks, at 19.3%, down from 20.7% in the last quarter.
The results of the survey should present opportunities for structured products providers, as the majority of products sold in China are wrapped as wealth management schemes, with over 90% of sales consistently generated by this wrapper in recent years.
The survey also found that 42.3% of households plan to save more, down 0.1 percent from the previous survey.
A number of Chinese banks will post annual results this week, with Agricultural Bank of China, Bank of Communications and China Merchants Bank all due to report on Tuesday, March 28, while China Construction Bank and Industrial and Commercial Bank of China results are due on Thursday.
Agricultural Bank reported in August that its principal-guaranteed wealth management products operations generated a net loss of RMB1.2bn (US$0.18bn) in the six months to June 30. The bank's wealth management products balance as of June 30 amounted to RMB1.5bn, including RMB1.04bn in retail products and the rest in corporate wealth management products.
Bank of communications reported inflows to wealth management products in the first half of this year increased by 17.99% year-on-year, to RMB11,775.6bn, on the back of 5,107 issued products, while the on-and-off-balance sheet wealth management products denominated in renminbi increased by 5.31% on a semi-annual basis, to RMB1,534.74bn.
Ping An reported earlier this month that it held RMB166bn of wealth management products in its insurance business, accounting for 8.4% of the division's assets, in comparison with RMB142bn and 8.2%, respectively, for 2015, while off-balance sheet wealth management products stood at RMB744bn, up from RMB587bn for 2015.
Ping An and Agricultural Bank are the biggest wealth management product distributors in China, according to the SRP database, with a total of 1,612 products and 1,231 products, respectively.
The PBoC survey comes after a survey by Hong Kong's Hang Seng Bank earlier this month, which questioned over 3,000 Hong Kong and Mainland China investors, found that 70% of Mainland and 55% of Hong Kong respondents plan to increase their global allocation over the next 12 months. Over the next 12 months, more than 35% of Mainland respondents plan to increase their exposure to Hong Kong, while 20% of Hong Kong respondents plan to increase their allocation to the Mainland, the Hang Seng survey found.
Click here for the full People's Bank of China household survey results (in Chinese).
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