A survey of affluent and high net worth individuals in Singapore, Hong Kong and United Arab Emirates shows that Singaporeans are less optimistic about the investment climate than at the start of 2013, while residents in the other two jurisdictions haven’t changed their views much.

A survey of just over 1,600 affluent and high net worth individuals in Singapore, Hong Kong and United Arab Emirates shows that Singaporeans are slightly less optimistic about the investment climate than at the start of 2013, while residents in the other two jurisdictions haven’t changed their views much.

The results of the Friends Provident International Investor Attitudes Edition Three – November 2013 also shows that Singaporean investor attitudes also weakened compared with Q4, 2012, as did those of residents in Hong Kong, while UAE attitudes improved.

Gold has continued to hold its position as the most positive asset class, although investment sentiment has deteriorated slightly in both Hong Kong and Singapore. In contrast, attitudes to equities have continued to improve, bringing preference for this asset class in line with gold, the Friends Provident International report said.

Affluent investors are now less confident about investing in bonds and property. Uncertainty about the current US fiscal situation seems to have hit respondents’ confidence in US government bonds with just 36 per cent of respondents saying now is a very good or good time to invest. In contrast, attitudes towards investment in corporate bonds and emerging market government bonds are more positive with 45 per cent and 51 per cent respectively saying now is a “very good” or “good” time to invest.

Some 58 per cent of respondents said now is a good time to invest in gold; 58 peer cent said this of equities; 55 per cent said this of foreign exchange markets, and 46 per cent said it was a good time to invest in collectibles. Some 53 per cent of respondents said it is a good time to invest in property, down from 58 per cent saying this in the previous survey.

Regional swings

Despite a slight downtick in sentiment since the last edition, the UAE remains the most positive place when it comes to investing in property, with just 12 per cent thinking now is a bad time to invest and 63 per cent thinking now is a good time.

In contrast, affluent respondents in Hong Kong and Singapore are less positive about the property market; around a fifth to a quarter (26 per cent in Hong Kong and 18 per cent in Singapore) saying the market is not currently attractive.

On equities, there has been a notable rise in sentiment in Hong Kong with 69 per cent of respondents saying now is a good time to invest, versus 59 per cent in the last edition. Furthermore, Hong Kong respondents are now notably more positive about equities than respondents in the other two regions.

While respondents in the UAE have not changed their attitude towards investing in gold since the last edition, those in Hong Kong and Singapore have become significantly less positive. Consequently, the UAE is now by far the most positive towards gold of the three regions, with 66 per cent of respondents saying now is a good or very good time to invest versus 55 per cent in Hong Kong and 54 per cent in Singapore.

Among other details, the report said that 65 per cent of Hong Kong residents feel financially secure, about half of those in UAE do so but only 45 per cent in Singapore do so. Some 27 per cent of Hong Kong residents would seek financial advice before making an investment decision, but 41 per cent of Singaporeans will do so and 30 per cent of UAE residents do so.

“I think the most interesting finding is about the people behind the report. In Hong Kong, 22 per cent of male respondents aspire to spend their retirement looking after their grandchildren. The figure was just 13 per cent of women – perhaps raising one generation was enough,” said James Tan, managing director, Friends Provident International.

“In Singapore, the majority of respondents in all three regions said that they “rely a lot” on their financial advisor. This perhaps implies that they might do their own research alongside what they are recommended. Very few use their financial advisor as execution only; eight per cent in the UAE, six per cent in Singapore and just three per cent in Hong Kong,” Tan continued.

"Education and retirement were the top savings priorities across all three regions. This information, alongside the reliance on financial advisors, suggests that perhaps there are opportunities for them to innovate or create a niche offering. This could be along the lines of retirement planning, investment opportunities that minimise currency risks (since 40 per cent of Singapore based respondents want to send their children abroad to study), or providing access to popular commercial property funds (the usual way to access commercial property as an asset class),” he added.