Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Friday, Mar 01, 2024

Where are affluent Hongkongers investing amid high inflation, volatility?

Where are affluent Hongkongers investing amid high inflation, volatility?

The proportion of affluent Hongkongers investing in overseas markets has nearly doubled this year, but inflation and market volatility are weighing on overall financial confidence, according to Charles Schwab.

The proportion of affluent Hongkongers investing in overseas markets has nearly doubled this year, but inflation and market volatility are weighing on overall financial confidence, according to a survey by US brokerage Charles Schwab.

An index tracking the financial well-being of this group of “rising affluents” in the city showed that 37 per cent of respondents are investing in overseas markets, compared with 20 per cent last year. The US remains the preferred destination, with allocation doubling to 19.7 per cent from last year’s 9.7 per cent, according to Charles Schwab’s annual survey released on Tuesday.

“Rising cost of living is clearly top of mind for Hong Kong’s rising affluents this year due to the current higher inflationary environment,” said Michael Fong, managing director at Charles Schwab Hong Kong. “As a result, investors are looking to obtain higher returns and are increasingly recognising the importance of overseas investments in helping them achieve their goals in a volatile macro environment.”

The brokerage, which manages almost US$7 trillion of clients’ money, commissioned Nielsen to conduct an online survey from September 7 to 22 this year. It interviewed 1,048 people in Hong Kong aged 18 to 65 earning between HK$20,000 and HK$80,000 a month, the city’s so-called “rising affluent”.

Well-to-do Hongkongers have shown an affinity for US stocks, according to a Charles Schwab survey.

Some 8.2 per cent more respondents compared with last year were concerned about the impact of rising cost of living on personal debt and children’s education.

Hong Kong’s overall consumer price index (CPI) – a measure of changes in the cost of goods and services bought by households – rose by 1.8 per cent in October year on year. Electricity, gas and water charges soared 13.4 per cent, while the cost of clothing and footwear increased by 4.5 per cent and food bills went up by 3.4 per cent. For the first 10 months of this year, the overall CPI increased by 1.9 per cent year on year.

On overseas investments, Fong said “the US market in particular offers Hong Kong investors serious portfolio diversification opportunities given its size, liquidity and transparency, all of which are critical in helping deliver risk-adjusted returns during periods of high market volatility.”

Most global markets have been affected by geopolitical tensions, rising interest rates and galloping inflation. However, the Dow Jones Industrial Average has fared better than the Hang Seng Index, losing about 7 per cent so far this year compared with nearly 16 per cent for the Hong Kong benchmark.

The survey found that diversification to improve overall financial security and a higher return on investment were the top motivators for overseas investments.

With the current market uncertainties and challenging macro environment clouding investor confidence, the financial confidence sub-index of the rising affluents has fallen by 3.76 per cent from last year.

The group is investing less as shrinking personal liquid assets and rising cost of living affected their overall savings and investments, according to the survey.

However, the survey showed that rising affluents with overseas investments were financially more confident than their peers. Some 15 per cent of overseas investors were more satisfied with their personal financial status compared with non-overseas investors’ 8.9 per cent.

Overseas investors were also optimistic about their personal financial growth prospects this year, with a 7.3 per cent jump compared with last year, according to the survey. They also believe that their financial situation will improve over the next five years. While for non-overseas investors, the sentiment dropped by 4.1 per cent.

More than half the respondents chose stocks, fixed-term deposit and insurance as their preferred investment products. About 33 per cent owned wealth management products offered by banks, doubling from last year’s 15.3 per cent, according to Charles Schwab.

“A great number of rising affluents believe that they need a financial plan as well as a clearer and longer timeline to achieve their financial goals,” Charles Schwab said in the survey, indicating a strong preference for long-term investments to weather the volatile macro environment.


Related Articles

Hong Kong News
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.