Singaporeans are the biggest pessimists of all wealthy Asian private banking clients, according to a new survey from Bank of Singapore.

Bank of Singapore asked its clients who attended its 2012 outlook a number of questions, the responses to which illustrate the risks of behavioural bias affecting financial decisions. The bank would not disclose the number of clients asked, nor the breakdown of nationalities. 

In response to the question 'do you think 2012 will be a better year?' Singapore was the only region where the majority of opinion was negative. Forty five per cent of Singaporeans believed this year would be an improvement on 2011, compared with about two thirds of all other Asian countries.

In contrast, opinion in Indonesia was most positive, possibly reflecting the buoyant domestic economy, said the bank. Singaporean’s negativity seemed to be because of caution over the local housing market, following government measures in late 2011 to raise transaction taxes in order to deter speculation.

"This (difference in opinion) might reflect a behavioural confirmation bias driven by local conditions which is somewhat surprising when the past six months have seen a broad "risk-on, risk-off" market, mainly driven by events outside the region. Correlation of different risk assets rises in a crisis, and local conditions become less important," said Richard Jerram, chief economist and author of the report at BoS. 

The survey found a high level of agreement on the question of what was the greatest risk, with the European debt crisis moderately ahead of a hard landing in China. Fears of a US double-dip recession did not trouble many. 

BoS also found a widespread recognition that the Federal Reserve is unlikely to raise interest rates any time soon. Only one-third of respondents expected an interest rate increase by 2013, while 28 per cent see no move from the Fed until 2015 or later.

When asked what was the best and worst performing assets of 2012, the sample was also split. Nearly 50 per cent of Singaporeans say property will be the worst performing asset class, and only 4 per cent of favour it this year. This compares to 21 per cent and 11 per cent of other Asian countries, respectively. Singaporeans overwhelmingly prefer equities, with a third saying stocks are their favourite asset class compared with just over a quarter of the rest of Asia.

Reversing the question, the bank asked about the worst performing asset class in 2012. The recognition that cash should deliver poor returns was striking, as was the small proportion believing equities will deliver the worst returns.