Property in Hong Kong has lost is allure with cash and gold now seen as preferable investments. But investor confidence in Hong Kong, Singapore and UAE generally is at its lowest since Friends Provident International began compiling its Investor Attitudes Reports.
The Friends Investor Attitudes Index dropped in all three of the markets measured, the first time this has happened since the report began in June 2010. Hong Kong and Singapore's index scores dropped four points each to 11 and 12 respectively while United Arab Emirates (UAE) dropped two points to 15.
The sharp fall in the Hong Kong index has been driven by volatile movements in sentiment across the asset classes. The global financial uncertainty is causing Hong Kong investors to choose less risky options with equities and shares suffering the most with a drop of 17 points to one point and the favourability of property now below zero at -3. By contrast cash soared 16 points to 23 and the firm favourite 'safe haven' of gold with a score of 30 remains the most favoured asset class.
In Singapore the index also declined driven by decreased scores across most asset classes with money and currency markets showing the largest drop of 12 points. A drop of 10 points in the favourability of equities and shares made this the least popular category overall.
The only region showing relative stability in most asset classes is UAE, where cash and gold, despite a slight decline, remain the preferred options. Collectables however, have seen a relatively steep decline, plummeting to a level last seen in the fourth quarter of 2010.
John Van Der Wielen, Managing Director International at Friends Life said:
"2011 was an eventful year with many issues, especially the Eurozone crisis, knocking investor confidence around the world. Since the start of this year equity markets have rallied strongly and the returns delivered are contradictory to the current investor sentiment. Financial markets though are likely to remain volatile and any improvement in investor confidence will partly be dependent on the European authorities finding a comprehensive solution to the sovereign debt crisis."
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