Cimigo annual banking survey reviews investor confidence in Hong Kong

Overwhelming majority of HK investors welcome establishment of the FDRC: Cimigo annual banking survey

HONG KONG – An overwhelming majority of Hong Kong investors believe establishment of the Financial Dispute Resolution Centre (FDRC) is beneficial to the general investor and will enhance confidence in the Hong Kong financial system, according to a new survey by marketing and brand research specialist, Cimigo.

Cimigo’s annual banking survey results show that 87% of Hong Kong investors aged 25 and over agree that setting up the FDRC is beneficial to investors. A further 85% of respondents also agree that establishment of the FDRC is useful in enhancing confidence in the Hong Kong financial system.

Cimigo Managing Director Hong Kong, Ms Winnie Yeung, said the survey shows that Hong Kong’s investors view the launch of the FDRC by the Hong Kong government as a positive move.

“More than 80% of Hong Kong’s investors questioned about the establishment of the FDRC in the Cimigo banking survey believe that the Centre will be of overall benefit to them and Hong Kong’s financial system,” Ms Yeung said.

“However, one area that the FDRC does need to address is awareness of the Centre among investors, as only 41% of people surveyed were aware of the establishment of the FDRC at the end of June 2012.”

The annual survey asked more than 400 general Hong Kong investors aged 25 and above a range of questions about their confidence in the Hong Kong banking sector, their RMB investment and their use of mobile banking services. The survey also provides insights into the investment attitudes of the ‘silver hair’ segment, consumers aged 55 and above.

RMB investment less attractive than in previous years The Cimigo banking survey examined investor’s attitudes towards RMB investment, as well as their use of RMB savings. Results show that although investment intentions and the number of RMB savings accounts are high, investor’s belief that the RMB is a safe investment is not as strong as it has previously been.

More than half (59%) of all investors surveyed have an RMB savings account, with that figure rising to 81% of affluent consumers, who are those with HK$1 million or more in liquid assets.

Despite the relatively high number of accounts, consumer’s views on RMB investment are less enthusiastic than they have been in previous years. Among the total investor population surveyed, 56% believe that the RMB will definitely be a better investment prospect than the US dollar (USD) or Hong Kong dollar (HKD) in the long run, compared to 68% in 2010.

This decrease in RMB confidence is more pronounced among younger consumers aged 25 to 29 years old and the affluent. Among the younger consumers, only 40% now believe that the RMB has better long-term prospects than the USD or HKD, compared to 66% in 2010.

Among affluent consumers, 58% now believe that the RMB has better prospects than the USD or HKD in the long run, down from 74% in 2010.

Although confidence has dropped, RMB investment intentions remain solid, with 58% of investors with an RMB savings account saying they planned to increase their holdings in the next year, while 48% of those who don’t have an RMB savings account also plan to start investing in RMB products in the next 12 months.

Ms Yeung said the reasons respondents gave for their positive or negative investment intentions reflected this contradiction and show that Hong Kong investors are unsure about where they should be investing in the present economic climate.

“The Cimigo banking survey results show that 60% of investors with a negative RMB investment intention cited the worsened investment atmosphere as a reason for their view.

“Among investors with positive RMB investment intentions, only 19% see the overall RMB environment as optimistic and only 23% believe that RMB investments carry a lower level of risk. However, among those same investors, 59% believe that RMB related products are either more stable or will provide a higher return than the alternatives,” Ms Yeung said.

“So while Hong Kong investors are not overly confident in the RMB, they do not feel that there are many other alternative investment options available to them.

“Although investors are concerned about the economic environment in China, they still believe RMB products will outperform those from the rest of the world economies,” Ms Yeung added.

About the survey

The annual Cimigo banking survey has been conducted by Cimigo since 2009 and is designed to provide information on investor confidence, the level of RMB investment in Hong Kong, and the development of mobile banking. The survey is conducted using an online methodology among more than 400 Hong Kong general investors aged 25 or above. The survey includes a booster sample of the ‘silver hair’ segment, comprised of more than a hundred Hong Kong investors aged 55 or above.

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