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Hong Kong investors reluctant to abandon cash even as economic outlook brightens: survey
- They will only consider reallocating from cash and deposits into investment products when interest rates come down to 2.5 per cent, according to a survey by the Hong Kong Investment Funds Association.
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Retail investors in Hong Kong are hesitant to move out of cash even as they grow more optimistic about the economic outlook, a recent industry survey found.
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Local investors would only consider reallocating from cash and deposits into investment products when interest rates come down to 2.5 per cent or below, according to the survey by the Hong Kong Investment Funds Association (HKIFA), which represents the local units of international fund houses. The city’s key lending rate currently stands at 5.75 per cent, the highest level since December 2007.
More than half of the respondents prioritised “regular collection of interest” as their top investment goal, followed by capital growth and outpacing inflation. Meanwhile 55 per cent of the retail investors surveyed expressed a positive outlook for the global economy over the next 12 months, and 52 per cent were optimistic about the economic prospects for Hong Kong and mainland China.
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“Many still seem reluctant to allocate more cash into investments although they foresee a favourable economic outlook,” said Nelson Chow, co-chair of the HKIFA’s unit trust subcommittee. “The sentiment is definitely still defensive at the moment for sure.”
Money market funds and fixed-income funds, which were the most popular products among retail investors in the first three months of the year thanks to their steady yields, are likely to have continued to account for more than half of total retail fund sales in the second quarter, he said.
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