Investor sentiment in Asia dropped in the third quarter, led by investors in Japan, Hong Kong and Taiwan, according to the Manulife Investor Sentiment Index.
The index dropped six points to 15 as stock market volatility led to greater caution in the equities markets and investors chose to hoard cash, says the Canadian financial services group, based on interviews with 3,500 professionals in seven Asian markets.
‘These findings underline the caution felt by investors around the region. People are sitting on their hands, unsure what to do,’ says Robert Cook, president and CEO of Manulife Financial in Asia, in a press release. ‘The survey is clear that Asia investors aren’t looking for excitement. They want secure, steady investment returns. From their perspective that makes a lot of sense, particularly when saving for long-term goals.’
Investor optimism dropped across Asia, except for China, where it increased to 17 points in the third quarter from 14 points in the previous three months, and Singapore, where it edged up to 13 points from 12. Sentiment in Japan dropped to nine points from 21 and it fell into negative territory in Taiwan, plunging to minus-nine points in the third quarter from one point in the second. A negative number indicates pessimism while a positive number points to a degree of optimism.
Investor sentiment was lowest in Hong Kong, at minus 14 points from minus 11 points in the second quarter, with Taiwan the second-lowest. Sentiment was highest in Malaysia, where the index inched up to 49 points in the third quarter from 48 in the second, Manulife says. Indonesian investor optimism rated 38 points in the quarter.
Cash holdings across the region rose to an average of 22 months worth of personal income per investor. Cash now accounts for about 40 percent of the total assets of investors, highlighting the ‘value investors place on safety, stability and liquidity,’ Manulife says.
