Hong Kong Investor Confidence Index Rebounds Sharply

Jul 08, 2009

  • The Index is designed to reflect local investor sentiment towards the Hong Kong market over the next 6 months, the latest findings show that the confidence of Hong Kong investors has strongly rebounded.

Hong Kong, 8 July 2009:  J.P. Morgan Asset Management (JPMAM) today announced the results of its twelfth quarterly survey conducted for the J.P. Morgan Investor Confidence Index (JPMICI) in Hong Kong.  The Index is designed to reflect local investor sentiment towards the Hong Kong market over the next 6 months.  The latest findings show that the confidence of Hong Kong investors has strongly rebounded from its lowest level of 95 in the last quarter to 119, the same level seen in June 2008.

The J.P. Morgan Investor Confidence Index rose from 95 to 119 against a neutral level of 100 in the latest survey, representing a significant increase of 24 points from the first quarter of 2009.  The June index shows signs that investor confidence has bottomed out.  At the same time, the sub-indices presenting the Hong Kong economic environment, Hong Kong investment environment and atmosphere, and global economic environment recorded 30 to 31 points increase from the last quarter.  In terms of percentage increases, this ranges from 33% to 37%. 

Mr Marco Tang, Head of Intermediary Business said, “The last quarter has seen a long-awaited recovery in investor confidence.  Investor sentiment has rebounded as the global stock markets rallied during the past 3 months, and investors are starting to enter the markets in greater numbers.  30% of investors indicated they would increase their investment in the next 6 months while only 18% said the same in the last quarter.”

“However, we can see that investors are still very cautious in the face of market volatility.  As Hong Kong continues to fight against the current recession, pressure on the labour market will persist.  The index representing better employment opportunity recorded 95, which is 5 points below its neutral level.  In the local stock market, 66% of investors are seeing a wrestle between the bull and the bear at present.  Only 12% feel that the bear market is over and Hong Kong has re-entered a bull market.  Looking at the Hang Seng Index (HSI), 54% of investors anticipate the index will move sideways between 18,001 and 20,000 points by end of December.”

The J.P. Morgan Investor Confidence Index score is derived from asking survey respondents six questions to clarify the confidence of investors about (Q1) the Hang Seng Index, (Q2) HK economic environment, (Q3) HK investment environment and sentiment, (Q4) global economic environment, (Q5) the possibility of personal asset appreciation, and (Q6) the possibility of increasing their investment.  These 6 questions form the sub-indices of the J.P. Morgan Investor Confidence Index.  The Index and all sub-indices have a range between 0 and 200.  A number greater than 100 represents a positive outlook and vice versa.

48% of surveyed respondents this quarter indicated a preference towards aggressive investment strategies, 6% higher than the 42% observed last quarter.  Both the aggressive (23% for Jun 09 and 12% for Mar 09) and conservative investors (15% for Jun 09 and 13% for Mar 09) have an increased preference toward overseas markets.

The survey also shows that 32% of surveyed respondents have invested in overseas markets over the past 6 months. In terms of market preferences, Mainland China (70% for Jun 09 vs. 68% for Mar 09), Emerging markets (32% for Jun 09 vs. 30% for Mar 09), USA (30% for Jun 09 vs. 35% for Mar 09), were preferred. 

Ms Grace Tam, Vice President of Investment Services added, “Although the global economy has stabilized somewhat in the second quarter, the full recovery is yet to be confirmed.  In 2H2009, we believe investors are looking for a pullback as a digestive pause.  With substantial fiscal and monetary stimulus in place, the world economy will continue bottoming out, with signs of renewed growth in China.  In particular, risk appetite is slowly picking up in Asian and emerging markets as these market equities have historically performed well when global growth begins to recover.  If earning momentum is proven to have turned around in 2H2009, Asian and emerging markets will inevitably benefit from earnings upgrades.”

Cimigo, an independent market research company, was commissioned to conduct the survey on behalf of J.P. Morgan Asset Management.  The survey was developed by interviewing a random sampling of 510 retail investors (N = 510) aged between 30 and 60 who have at least 5 years of continuous investment experience with liquid assets in excess of HKD100,000.  The survey was completed at the end of June 2009.

J.P. Morgan Asset Management has been monitoring retail investor sentiment closely within the major markets of Europe for some time by conducting an Investor Confidence Survey.  This first began in London in the early 1990’s with the publication of a UK Investor Confidence Index.  In Asia, a similar Investor Confidence Index has been launched by the firm in Japan and Taiwan and has been well received by local investors.

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For further information please contact:
Daniel Chui, Head of Investor Communications
Telephone: (852) 2800 2874
Email: daniel.wc.chui@jpmorgan.com
Issued by JPMorgan Funds (Asia) Limited

Notes to Editors

J.P. Morgan Asset Management (“JPMAM”) is the brand name of J.P. Morgan Chase & Co’s asset management companies.

J.P. Morgan Asset Management is a global asset management leader providing world-class investment solutions to clients. With over US$1.1 trillion in assets under management (the Asset Management client funds of J.P. Morgan Chase & Co. as at 31 March 2009) and offices in 47 locations around the world, J.P. Morgan Asset Management offers global coverage with a strong local market presence, and leadership positions in most asset classes.

Commitment to Hong Kong
JPMAM’s investment management business in Asia has remained headquartered in Hong Kong for more than three decades and today has about 500 employees based in this location. JPMAM and its investment arm - JF Asset Management - are one of the largest local investment managers in Hong Kong with over US$70.7 billion (31 March 2009) of funds managed across the Asia Pacific region.

As part of a major global investment group, we are committed to providing specialist teams with the resources needed to deliver successful products and performance to our clients. The Hong Kong-based Pacific Regional Group, together with the local presence of the Global Portfolios Group, forms the core of JPMAM’s investment management operations. In addition to the knowledge and experience of our individual investment professionals, the stability of the team has enabled JPMAM to develop strong relationships with local clients.

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