Investors in Hong Kong remain steadily optimistic about the local market over the next six months, with the latest confidence index rating by JP Morgan reflecting a score of 116 by the end of second quarter, compared to 117 in March 2013.

According to the 28th quarterly JP Morgan Asset Management Investor Confidence Index, which examines how investors feel about specific market factors, 81 per cent of investors anticipate that the Hang Seng Index will trade above 20,000 points by year-end. Only seven per cent feel their investment portfolio will decrease in value over the coming months.

The Index is based on six questions covering the Hang Seng Index, the Hong Kong economic environment, the investment atmosphere, the global economic environment, the possibility of personal asset appreciation and the possibility of increasing investment. 

As a show of optimism, the global economic environment sub-index moved up three points from 105 to 108, while the increase in the investment sub-index rose from 111 to 112. The investment atmosphere index remained stable at 116 and although the Hang Seng and economic environment sub-indices fell to 123 and 116 respectively (from 129 and 119), they remain in positive territory. 

"Investors are seeing the value of diversification, a good strategy in times of fluctuation and volatility. It is Asia which again shows the most attraction. China continues to be seen as the one with the highest potential (73 per cent), followed by Hong Kong (46 per cent) and Japan (45 per cent)," said Henry Tong, vice president of intermediary business at JP Morgan Asset Management. 

The survey was conducted through market research firm Cimigo, which polled respondents aged 30 to 60 with at least five years continuous investment experience with liquid assets valued at least HK$100,000 ($13,000).