Investors in Hong Kong, Singapore and UAE going for gold

Gold continues to be the most favoured asset class in Hong Kong, Singapore and United Arab Emirates (UAE) according to the latest Friends Provident International (FPI) Investor Attitudes report.

In addition to gold, equities and currency markets remain the favoured asset classes in Hong Kong. While Singapore and UAE retain a strong interest in cash there has been a steep fall in its popularity among Hong Kong investors.

Investor confidence continues to rise in the UAE, with its index score more than doubling to 13 points since the report was launched in June last year. Singapore leads the way as the most stable and positive region with an Index score of 20, results having maintained this level of positivity since October 2010.

The Index also shows a slight increase in the level of pessimism among Hong Kong investors towards the markets, with the Index score for Hong Kong dropping by one point to 18 in this wave.

‘The report gives an insight into people's views on asset classes and the investment market at a particular point in time. It's interesting to see how people's moods reflect what's happening in the world's stock markets and how the confidence of investors is affected by the constant changes,’ said Rocco Sepe, managing director international at Friends Life.

‘The continued success of the report shows that people's interest in investing is continuing despite global economic concerns. I recommend that people seek expert professional advice to enable them to achieve their investment goals,’ he added.

Hong Kong investors feel that now is a good time to invest in the equities market. The fact that they are also choosing real assets such as gold, could indicate an underlying concern about inflation, the report says. Compared to investors in Singapore and the UAE, Hong Kong investors are still the least likely to hold cash, with significantly more respondents believing that now is a bad time to hold cash than in January 2011.

Medium term remains the prevailing strategy for Hong Kong investors, although there is rising interest in short term strategies from 17% in January 2011 to 21%.

UAE respondents, although still less confident than Hong Kong and Singapore, view the market as steadily improving and think the improvement will continue over the next six months.

In Hong Kong there is increasing pessimism towards market performance over the next six months and though medium term is the preferred option, there has been a rise in the number of investors looking to make short term investments.

While in Singapore, a robust Straits Times is giving investors confidence, accounting for signs of a gradual shift from short term, low risk, to long term, high risk investments.

One in five UAE respondents said they were not concerned about the effect of inflation on their investments and, perhaps reflecting an absence of professional advice, over 20% said they would save more in cash to mitigate the effects.

In Singapore and Hong Kong, investors were more likely to invest in the stock market to mitigate against inflation than in UAE. In Hong Kong, over 60% of respondents would increase their investment spending to weather against inflation, with one in five stating they would increase investments by more than 20%.