Tue, Jan 24, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Asia Pacific Intelligence

Manulife's inaugural survey finds investor confidence low across developed Asia

Tuesday, April 09, 2013

The inaugural Manulife Investor Sentiment Index in Asia (Manulife ISI), based on 3,500 interviews across seven Asian markets, has revealed that investors in developed Asia are not confident it is the right time to invest, with Hong Kong and Taiwan the most pessimistic. This contrasts with higher confidence in the emerging markets of Indonesia and Malaysia as well as in Canada and the U.S. The interviews were conducted in Hong Kong, China, Taiwan, Japan, and Singapore, Malaysia and Indonesia.

Robert A. Cook, President and CEO, Manulife Asia said, "From an investment point of view, there's no more exciting place than Asia right now. There are so many opportunities across the region for people to invest to achieve their life goals. To help them do that, it's extremely important that we understand investors' needs. The Manulife Investor Sentiment Index helps us do that by providing the kinds of market insights that the Index has been doing in North America now for many years."

This first Manulife ISI in Asia shows that the top reason investors believe it is a bad time to invest is that "the market is too volatile". This is the top answer for all assets except property, regarding which the top reason people offered was "the current price is too high and a correction is expected".

Reflecting the relative pessimism across the region, Asia investors overall indicate they are holding the single biggest portion of their assets in cash, even though respondents in all markets outside Indonesia and Malaysia have only weak confidence that this is an effective investment strategy.

Over half (56%) of Asia investors report being either on track or ahead of schedule to meet their financial goals, significantly more than in Canada. While 10% of Asia investors say they are so far behind schedule they are unlikely to catch up, this is only about half the level in Canada. In terms of achieving their financial goals, the top two most commonly-cited resolutions this year are to learn more about investing, followed by a desire to develop a financial plan. Moreover, more investors in Asia place these as their top resolutions by a factor of two-to-one compared to those in North America.

Despite the current pessimism, the Manulife ISI also shows investors across Asia are relatively optimistic about the future, with the sole exception of Japan. Clear majorities report they expect to be better off in two years' time €“ very similar to the results in North America.

"The results seem to point to a gap between investors' goals and their strategy to achieve them," said Philip Hampden-Smith, Chief Marketing Officer, Manulife Asia. "Interestingly, it seems many are aware of that gap, which may explain why the highest resolution is learning more about how to invest. It will be fascinating to see how sentiment tracks over time, especially given that most respondents are optimistic about the future."

Manulife Investor Sentiment Index - key findings:

Investor sentiment

Investors across markets in Asia have only low levels of confidence that it is a good time to invest, with Hong Kong and Taiwan investors being the most pessimistic. This contrasts sharply with more enthusiastic levels of investor sentiment in the U.S. and Canada and, by far higher margins, in Malaysia and Indonesia. Overall, young Asia investors, aged 25-29, are more optimistic than other age groups, except in Hong Kong, whose young investors appear the most pessimistic in Asia.

Reasons for not investing

Sentiment on the issue of investing in real estate (either their primary residence or other properties) diverges sharply across markets. In Hong Kong and Taiwan net sentiment was clearly negative, whereas sentiment is positive in all other Asia markets, especially Indonesia and Malaysia, as well as in the U.S. and especially Canada. Nearly two thirds of Asia investors saying it is a bad time to invest in stocks report the main reason is "market volatility," a reason cited by over three quarters in China and Malaysia.

Investment preferences

Investors in Indonesia report it is a good time to hold cash and invest in property (either their own home or other real estate), with little appetite for stocks, a pattern also evident in Canada. In contrast, in Hong Kong the reverse is true. In Malaysia two-fifths of investors' assets are stored in cash and this aligns with the widely-held sentiment in that country that it is a good time to hold cash. In Japan, though, where cash makes up about the same proportion of investors' assets, sentiment towards cash was clearly negative.

Financial goals

Two thirds of investors in China say they are either on track or ahead of schedule to meet their financial goals. In contrast, in Japan nearly a quarter report being behind schedule and unlikely to catch up. There was agreement across all markets in Asia and North America on the two most cited steps taken to get back on track, these being increasing savings and reducing spending.

Asia investors using a professional financial advisor report more optimism towards investing than those without an advisor. A quarter of Asia investors have a professional financial advisor, versus two fifths in Canada. Of those who do not have an advisor, over a third in Hong Kong, Singapore and Taiwan said the main reason was a lack of trust, which was a factor for only 6% in Canada.

Personal finances

Over two fifths of Asia investors report feeling better off than two years ago, though with variance across the region. In China, 60% agreed with this statement, whereas only a fifth did in Japan. In Singapore, a fifth of investors feel worse off than two years ago, while in Indonesia this is true of just 4%.

A majority (54%) of investors across Asia believe they will be better off in two years' time, an almost identical degree of optimism as in Canada. Looking ahead, the most optimistic Asia investors were in China, where 68% expect to be better off in two years' time. This again contrasted with Japan, where only a quarter expects to be better off in two year's time.

 
This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.
Asia Pacific Intelligence
Asia Pacific Intelligence
Asia Pacific Intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - This hedge fund made 37% betting on banks in 2016 and remains bullish after the Trump rally, Hedge fund legend David Einhorn is making a big bet on GM, After impressive 85% return in 2016, hedge fund looks to Canadian gold producer, small banks[more]

    This hedge fund made 37% betting on banks in 2016 and remains bullish after the Trump rally From Forbes.com: Can bank stocks continue to rise after a 28% surge in the KBW Bank Index in 2016, fueled by a post-election rally as stock pickers returned to the beaten down sector? Forget the s

  2. SWFs - China sovereign wealth fund CIC plans more U.S. investments[more]

    From Reuters.com: China Investment Corporation (CIC), the country's sovereign wealth fund, is looking to raise alternative investments in the United States due to low returns in public markets, its chairman said on Monday. CIC will boost its investments in private equity and hedge funds as wel

  3. Some hedge funds strong start in 2017 nice contrast to 2016[more]

    With the 2016 HSBC Hedge Weekly performance rankings in the books - a year in which the same leader-board entries pretty much dominated unchallenged throughout the year - comes a new leader board that is a hard-scrabble mix of hedge fund styles and categories. What is clear after but a few short wee

  4. Macro hedge funds and CTAs outperform in December on strong dollar[more]

    Komfie Manalo, Opalesque Asia: The last month of 2016 saw risk assets climbing higher, as part of expectations that the new U.S. administration will remove barriers to growth and investment, Lyxor Asset Management said. December also saw the Fed hik

  5. Opalesque Exclusive: Roxbury credit events UCITS gathers more assets[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The Roxbury Credit Events Fund, launched in September 2015, was up 4.24% in 2016, having returned seven positive months during the year. The managers raised