Brexit spooks HK, Singapore retail investors

Brexit-related gloom has spread across the Pacific to settle on main street in Hong Kong and Singapore, according to a survey by market research firms CSG and Tolana.

Most retail investors expect Britain’s decision last week to leave the European Union to negatively affect their portfolios, with many intending to put their allocation plans on hold or possibly even change them altogether.

The survey polled 211 investors in Hong Kong and 225 in Singapore from households with median income and above and investments such as in stocks, bonds and funds.

Hong Kong investors were the most pessimistic of the two groups, with 65% saying the performance of their current investments would worsen over the next 12 months, as against 53% of those in Singapore. In both countries, older investors (50+ years) showed the most caution. 

Morever, almost half of investors in Hong Kong (45%) and Singapore (44%) said they would look for new opportunities or change their investment plan as a result of the referendum outcome. Around one-fifth said they would put their investment plan on hold (22% in Hong Kong and 17% in Singapore). A little over a third aim to continue with their original strategy (38% in Hong Kong and 34% in Singapore).

Hong Kong investors, already notably worried about the China slowdown, have become even less hopeful about economic recovery occurring in the next 24 months. Only 31% of Hongkongers are moderately confident that their economy will improve, compared to 46% of Singaporeans.

Again, it is the younger investors in Singapore who were more optimistic: 55% said they were confident of economic recovery within 24 months. Only 32% of Hong Kong youths gave the same response.

Another notable distinction between the two groups was Brexit's perceived impact on global investments. Singapore investors continue to have a more positive outlook, with 63% saying they thought global investment opportunities would remain the same or improve, while only 53% of Hong Kong investors shared this sentiment. 

Eyeing short-term benefits

One thing that both Hong Kong and Singapore investors agree on, however, is that they should make the most of opportunities offered by the current situation, at least in the short term (see table). As a result of a much weakened pound, the two most popular activities planned by both groups in the next 12 months are taking a holiday in the UK and buying sterling.

Tellingly, far lesser priorities in the same time frame are buying UK property (planned by just 5% in both Hong Kong and Singapore) and considering sending children to school in Britain (6% in Hong Kong, 7% in Singapore). These are obviously decisions that require considerably more thought and commitment – something the current environment is hardly conducive to.