LGT Asia has carried out its first investor survey from a sample of HNW individuals in Singapore and Hong Kong.

High net worth investors in Singapore and Hong Kong expect the global economy to improve slightly over the next three months, they anticipate a China-US trade deal in the second half of 2019, and are bearish on the Chinese renminbi, according to a debut study by LGT Asia. Singapore-based investors are slightly more cheerful about prospects than their Hong Kong peers.

The findings come from the private bank's Investor Sentiment survey, which Liechtenstein-based LGT conducted for the first time in the second-half of February among more than 300 high net worth investors.

The study showed that a majority (67 per cent) of survey respondents called themselves active investors, with a third of them holding equities for less than one year. Some 28 per cent typically sell stocks within one to three years.  Some 44 per cent allocated between 11 and 20 per cent of their portfolios to cash, in particular in Singapore. Similarly, 38 per cent of respondents hold 11 to 20 per cent of their portfolios in real estate, with Hong Kong-based HNW investors having a greater overall allocation to this asset class. In terms of managed products such as mutual funds or discretionary mandates, the use of these vehicles is more prevalent in Singapore than Hong Kong.

Close to 50 per cent of total respondents think that the global economic environment will improve slightly over the coming three months, with Singapore-based HNW investors being somewhat more optimistic than Hong Kong-based respondents.

The survey results indicate that a global recession is expected in the first half of 2020, with two further rate hikes from the US Federal Reserve in the pipeline. In terms of preferred equity markets, Hong Kong HNW investors voted highest for their home market (37 per cent) and then US equities second (19 per cent). For Singapore-based respondents, likewise, the home market scored highest (24 per cent) and then Asia ex-Japan stocks came in a close second place (21 per cent).

Given the ongoing trade dispute between the US and China, LGT focused its topical questions on this matter but also asked the respondents on their outlook on another hot topic: property markets. Overall, 42 per cent expect a Sino-US trade deal in the second half of 2019, with only 12 per cent saying that a resolution may take years to come.

A clear majority (70 per cent) think that China can avoid a hard landing in terms of economic growth, mainly due to robust domestic consumption and ongoing monetary/fiscal easing.

LGT said it was surprised that in spite of taking a constructive view on equities, respondents  were "somewhat bearish" on the Chinese renminbi, aka yuan.

"This might suggest that investors think that a weaker CNY could be part of the 'tool box' for the authorities in China to facilitate a soft landing. A further surprise is the high levels of cash in investor portfolios; this may suggest that while being generally positive on equities, investors want to have cash on hand to buy into market dips over the coming three to six months," the bank added.