Investor confidence at its highest in Singapore and UAE, index shows

Investor confidence is highest in Singapore and United Arab Emirates where the majority of investors predict that markets will improve over the next six months, according to a new report.

The latest Friends Provident International (FPI) Investor Attitudes report which started at six points in June 2010, experienced its biggest wave on wave increase from 13 to 18 points, and Singapore's Index, which began at 16, has risen to 21 points over the year as investors show continued positivity towards market conditions.

The optimism was reinforced by an upbeat outlook on the future, with 59% of investors in the UAE and 57% in Singapore predicting the investment markets would improve over the next six months.

Singapore has maintained the highest Index score throughout the five waves and saw 61% of investors optimistic about the current state of the market, mirroring the country's healthy economic growth of 8.3% in the first quarter of 2011.

Despite the political and civil unrest in the Middle East and North Africa (MENA) region 70% of investors in the UAE said that they are either more positive or have an unchanged view about investing in the UAE, indicating UAE could be seen as a ‘safe haven’.

‘A year on since we launched the Friends Provident International Investor Attitudes Report, we are seeing strong Index results for the UAE and Singapore and a steady return to confidence among investors,’ said Rocco Sepe, managing director International at Friends Life.

‘The Index is developing trend data which tracks the recovery of international markets following the global economic crisis. It continues to provide an insight into how investors feel about various investment options. The results reveal an optimistic outlook that suggests local markets are becoming increasingly attractive,’ he added.

The report findings for Hong Kong paint a different picture with the Index for the country dipping for a second time this wave to a score of 15 points. Investors demonstrated the lowest confidence in future market performance since the launch of the report, with only 52% of respondents predicting an improvement in the investment market within the next six months.

In the wake of the recent earthquake and resulting situation in Japan, Hong Kong investors were asked about their view of the Japanese investment market. Not surprisingly, over half indicated that they were at least slightly less positive about investing, or wouldn't invest at all in the Japanese market.
 
However, a relative amount of optimism remains for the wider Asian market, with 78% of investors in Hong Kong having an either more positive or unchanged view about investing in the Asian market now.

Reflecting growing confidence in local markets, most asset classes in UAE and Singapore increased in popularity, with money and property seeing the biggest rises in the UAE, and collectables having the biggest hike in Singapore. Conversely, low confidence in Hong Kong has contributed to a broad decline in favour across most asset classes, with property experiencing the biggest decline, followed by collectables and equities and shares. Gold however, remained the most popular asset class across all three regions.

Findings showed that in Singapore 95% of investors hold some form of protection product, with life insurance and critical illness being the most popular. The affluent, closely followed by the married are most likely to hold a range of products.