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Wisdom (28th Feb 2012)

S'pore investors seek safety in cash: poll

27th Feb 2012 The Business Times By JASMINE NG 2012 Singapore Press Holdings Limited Overall, locals' market sentiment has dampened: FPI SINGAPORE investors are making a dash for cash amid faltering confidence in the current market and its prospects, British financial firm Friends Provident International (FPI) said.

According to its quarterly Investor Attitudes report, cash is the only asset class to record an improved score in Singapore - from 28 to 30 points - while gold bullion is also still very much in favour despite dropping back by four points from its high of 33 points in the second quarter last year. Equity and currency markets experienced the steepest decline of some 10 points, to be the least favoured asset classes among Singaporeans.

'There is now a very obvious divide amongst asset classes, with gold and cash more than 20 points ahead of any other asset class in the favourability rankings of investors,' said Chris Gill, general manager of FPI South-east Asia. He added that the decline in attitudes towards money and currency markets could be a direct result of the sovereign debt crisis in Europe. For every four respondents to FPI's poll in Singapore, one believes that the Eurozone crisis will continue for another one to two years, with the 'affluent' and 'aspiring affluent' categories more likely to predict so. The 'up and coming' respondents seem more optimistic, believing the crisis will last between six months and a year. Overall, Singapore investors' sentiment towards current and future markets has dampened. Almost half of the respondents believe the current state of the market is worse than six months ago, and they are pessimistic about its prospects.

Investment choices: Aside from cold hard cash, gold bullion is also still very much in favour among Singapore investors

 Sharing Wisdom (28th Feb 2012) While some investors are erring on the side of caution, the majority of respondents prefer to maintain a more balanced risk appetite. 'Despite the volatile global market conditions, there appears to be a tactical, shorter- term approach being adopted alongside a longer-term strategic plan. We are not seeing a dramatic shift in risk appetites, but rather a change in where investors are choosing to invest,' Mr Gill said. Meanwhile, in Hong Kong, gold remains the most favoured asset class, though it has shed four points. At the same time, cash has soared to 23 points - an all-time high - suggesting that investors prefer not to part with their money despite high inflation, FPI said. Hong Kong investors are also less willing to choose 'riskier' options. Equities are down 17 points, while currency markets fell 10 points. Property and equities are the least favoured asset classes among Hong Kong investors. The European debt crisis has also crippled investor sentiment in Hong Kong, with investors showing the lowest confidence in market prospects yet. Almost half of the respondents from Hong Kong feel the Eurozone crisis could last beyond a year. The FPI report polled a total of 2,783 people in Singapore, Hong Kong and the United Arab Emirates. Both the sample sizes in Singapore and Hong Kong were 1,002. Source: The Business Times Connect with Wisdom Capital: Like our Facebook Page (http://ow.ly/9jhni) Follow us on Twitter (http://ow.ly/9jhr2) Visit our website (http://www.wisdomcapital.com.sg/)