With the surprising result from the recents referendum seeing the UK preparing to cut ties with the EU, CSG — one of Hong Kong’s leading marketing research firms – have teamed up with Toluna to conduct a quick poll to determine the sentiments amongst investors in the top financial centres in Hong Kong and Singapore.
The results suggest that it is Hong Kong investors who are feeling most pessimistic about the outcome, with 65% believing the performance of their current investments will worsen over the next 12 months, compared to 53% of Singapore investors (figure 1). Interestingly, in both countries, it is the older investors (50+ years) who are showing the most caution. There is an obvious disparity between the age segments of those who have a more positive outlook of the referendum’s result — in Singapore, it is the 25-29 age group who feel more enthusiastic about both their investments performing better (29%) and experiencing more global investment opportunities (45%). In Hong Kong, this trend lies with those in their 40s (26% and 35% respectively), while just 4% of young investors say their investments will perform better.
The results show that the already somewhat disillusioned Hong Kong investors have become even less hopeful about economic recovery occurring in the next 24 months compared to Singaporeans; only 31% of Hong Kongers are moderately confident that the Hong Kong economy will improve compared to 46% of Singaporeans (figure 2). Again, it is the younger investors in Singapore who are more optimistic — 55% say they are confident of economic recovery within 24 months. Only 32% of Hong Kong youths are confident.
“Financial advisors should see this as an opportunity to connect with their customers and develop strong relationship with them” explained Executive Director, CSG Simon Tye.
As a direct result of the Brexit vote, over 40% of both Hong Kong and Singapore investors state they will look for new opportunities while more than one-third will continue with their original investment plan (figure 3). In terms of the age difference, about a quarter of investors aged 50+ years are putting their investment plan on hold while young investors (below 50 years) tend to search for new opportunities.
Another notable distinction between the two regions is the impact on perspective on global investment that Brexit has caused; Singapore investors continue to have a more positive outlook with 63% saying they think global investment opportunities will remain the same or improve, while only 53% of Hong Kong investors shared this sentiment (figure 4). Similarly, 13% of Hong Kong investors concluded that global investments will decline drastically, compared with 8% of Singaporeans.
One important parallel between the two surveys was both regions’ investors taking a pragmatic and forward-thinking approach to the future. This has already been evidenced in the UK where, according to the South China Morning Post, Hong Kong investors are taking advantage of the weaker British pound by snapping up London properties after the Brexit results were announced on Friday. Other immediate actions for both regions’ investors include holidaying in the UK and buying pounds sterling — a third of participants surveyed in both regions have made both of these their priorities.