Longer-term pessimism for China is still intact as 84% of BofA respondents brace for a structural de-rating.
According to the latest Bank of America Asia Fund Manager survey, the outlook for the continent has «mildly improved», with a net 39% of respondents expecting a stronger economy in the next year, up from 24% in July's survey results and 6% in June.
Earnings expectations are similarly positive, as net 35% of investors forecasted profits in Asia to increase.
Meanwhile, investors have had a change of heart about China, with the severe lack of confidence recorded in July seeming to have receded slightly since the Politburo meeting at the end of the month.
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A net 35% of investors expect the economy to strengthen in the next 12 months, up from 27% in July, while only one in five expect a retest of the October 2022 lows in the equity markets, compared to more than half in July.
The Politburo meeting saw China pledge to step up stimulus measures as the country faces a significant economic slowdown, as well as discussing a number of topics from household consumption and local government debt to employment and property.
China's leadership reiterated it wanted to turn consumption into a key driver of growth and also gave a nod to industries that have been bleeding jobs in recent years and were particularly attractive to university graduates, such as AI and advanced manufacturing.
However, 84% of survey respondents still expected a structural de-rating for China equities. The BofA research also found that while an optimistic handful do expect Chinese households to put prior excess savings into investment and spending, two-thirds believe excess cash will remain in savings accounts.
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