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Asian investors are bullish on equities

Despite rising inflation and the pandemic, Asian investors will increase investment in the healthcare and technology sectors, according to a UBS GWM survey.
Central District - Hong Kong, China - East Asia, Hong Kong

Six in ten (63%) Asian investors remain optimistic about the six-month outlook for stocks in their region, and nearly four in ten (38%) plan to invest more in the next six months, UBS Global Wealth Management’s latest quarterly investors sentiment survey shows.

It found that 44% of Apac investors think inflation will last longer than 12 months, while 39% think it will last between six and 12 months. About 89% of Apac investors feel the impact of inflation on day-to-day life from the higher prices for goods.

UBS GWM surveyed 3,000 investors with at least $1m in investable assets from 4 to 24 January, 2022. The global sample was split across 15 markets.

Among Hong Kong investors, 52% said they want to add stocks to their portfolios while 46% said they will reduce bonds.

About 67% of Hong Kong investors remain optimistic on the region’s economy for the next 12 months, which is down from 70% since the third quarter of 2021.

Covid-19 is their top concern, with as much as 62% concerned about the pandemic situation, while 58% of Hong Kong investors are also concerned about inflation.

Asia anxieties

Despite the majority of Apac investors being optimistic about the stock market for the next six months, 45% are “extremely or very concerned” about market downturns.

Covid (52%) and inflation (52%) rank as the top concerns among Apac investors, with other concerns including: climate change (50%), long-term competitiveness of respective markets (49%) and tax increases (47%)

Top portfolio changes considered by Apac investors include: 49% intend to add portfolio hedges, 47% of respondents will reduce bonds, 46% will add stocks, 45% plan to reduce cash and 42% will increase borrowing. Apac investors see technology (58%) and healthcare (56%) as attractive sectors.

On the other hand, 74% of Apac investors have more than 10% of their portfolios in cash, and of those, 53% are waiting for the right opportunity to invest.

“With the effects of Covid-19 expected to impact the healthcare industry for years to come and a shift to a more digitalised world, investors see further opportunities in these sectors,” Iqbal Khan, president of UBS Europe, Middle East, and Africa and co-president of UBS Global Wealth Management, said in a statement.

“However, given high levels of inflation and interest rate hikes on the horizon, investors are waiting for the right moment to put their money to work,” Khan added.

Part of the Mark Allen Group.