Asian investors have grown more positive in their economic and market outlook for their own region compared with three months ago.
The proportion expressing optimism is up seven percentage points to 62%, and their confidence in the regional stock markets rose by the same proportion to 61%, according to a UBS GAM survey of global investor sentiment, released yesterday.
The outlook is even more sanguine in Hong Kong.
Sixty-four percent of Hong Kong investors are “somewhat or very optimistic” about the Asian economy over the next year, and 66% expect positive regional stock market returns during the next six months, with 53% planning to increase exposure to the markets, according to the survey.
Indeed, as many as 17% of Hong Kong respondents think that the Hang Seng Index will be 10% or higher in the next six months, while 43% think it will be 5-9% higher.
UBS GWM canvassed 2,854 investors and 1,151 business owners worldwide with at least $1m in investable assets (for investors) or at least $1m in annual revenue and at least one employee other than themselves (for business owners), from 29 December 2020 to 18 January 18, 2021. The global sample was split across 14 markets: Argentina, Brazil, France, Germany, Hong Kong, Italy, Japan, Mainland China, Mexico, Singapore, Switzerland, the UAE, the UK and the US.
The majority of total survey respondents (60%) have a positive economic outlook over the next 12 months, compared with 55% three months earlier. However, 63% of investors do not believe life will “return to normal” in the next six months.
In contrast, 70% of Hong Kong investors think the world will return to normal before the end of 2021.
However, emerging markets (65%) topped the poll among investment destinations for Hong Kong investors, followed by Asia (60%), the US (51%), Europe (47%) and Latin America (40%).
Their main interests and concerns are China’s next stage of development (63%), sustainable income (60%), diversification (59%) and a weaker US dollar.
More specifically – given a Biden presidency – the major themes among Hong Kong investors are technology (70%), healthcare (65%), sustainable investing (64%) – with 40% intending to increase their allocation to sustainable investments within the next six months — financial services (63%) and energy (61%).
Notably, sustainable investing seems to be gaining traction among Hong Kong investors, with 72% replying that sustainable options are important for their investment strategy, and 50% expecting to increase their allocation to the theme in the next 5 years.
The main reasons they will raise their exposure are to improve risk-return prospects (62%), and to increase diversification (53%).