A recent survey carried out by J.P. Morgan Asset Management found nearly one in five investors are planning to increase their investment amount in Asia over the coming six months, including in markets such as Japan and Hong Kong.
These findings were despite a majority (70%) of the respondents citing the economic growth slowdown in Mainland China as the main risk in the third quarter of 2014, along with uncertainty over the Mainland economic reforms (67%).
Also, in Hong Kong, two in three investors see volatility in the stock market as one of the biggest risks for the third quarter and as such, 61% of investors say the potential volatility is impacting their investment strategy.
The survey, conducted during June, had responses from 506 retail investors with liquid assets in excess of HK$100,000.
The report said the JP Morgan Investor Confidence Index, a measure of local investor sentiment towards the Hong Kong market over the next six months, has stabilised after the last survey’s fall, moving up by six points to an index score of 121.
Elisa Ng, head of retail distribution said: “After the concerns seen in the last quarter, it is encouraging to see an improvement in investor confidence again. This is mainly attributable to the improving investors’ confidence in the global economic environment, as witnessed in the sharp rebound in the Global Economic Environment Sub-Index.”
As per the latest survey, the Global Economic Environment Sub-Index shows the largest quarterly increase, up 13 points to 118.
According to Ng, more investors (21%) anticipate pursuing an aggressive investment strategy, with the equivalent figure for the last quarter being just 13%.
This can be seen with the rebound in interest in equities, with nearly one quarter of respondents looking to overweight their equity allocation compared to 17% previously.
China’s ongoing attraction is shown by 41% of investors who express an interest in investing in the Mainland’s fund market under the proposed mutual recognition arrangement even as they acknowledged lack of familiarity as a key barrier.
Half of these investors would consider allocating 10%-15% of their portfolio into such funds, with equities offering the most appeal.
Tai Hui, chief market strategist Asia for JP Morgan said emerging market equities are again attractive and cheaper than their developed market counterparts.
