A Fidelity global analyst survey has found significantly low levels of corporate confidence in emerging markets.
The Fidelity’s 2015 Global Analyst Survey reported that 59 per cent of analysts believe management confidence has “deteriorated” within emerging markets.
China's Global Sentiment Score stands at 4.4 points (the Fidelity index is based on a scale of one to 10, with 10 the most positive value).
Fidelity Worldwide Investment head of equity research Leon Tucker said: “A cautious approach prevails for China as economic growth slows.
“Credit risks in the cooling real-estate market and concerns about potential deflation are also exerting a negative effect.”
About 69 per cent of analysts covering China expect declining returns on capital, with only 32 per cent recording an increase in management confidence within companies.
“On the bright side, despite the economic slowdown, opportunities for income investors remain in China,” Mr Tucker said.
More than 80 per cent of analysts still expect Chinese dividends to be maintained in 2015, the survey found.
“A systemic crisis does not appear likely in 2015, as the Chinese government effectively controls both lenders and borrowers and the major banks’ loan book is still concentrated in state-owned enterprises,” Fidelity said.
The Fidelity Global Analyst Survey aims to identify changes in corporate conditions at an early stage and identify new trends and investment opportunities.