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China Investor Sentiment Plunges, Yet Most Still Optimistic China Will Lead Growth – Manulife Survey

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— China investor sentiment falls to its lowest level; sharpest declines in equities, property
— Japan’s economy divides opinion: investors optimistic in SE Asia, pessimistic in Greater China
— Rising sentiment in Singapore and Indonesia helps keep overall Asia Index flat

HONG KONG /PRNewswire/ — Investor sentiment in China plunged in the second quarter of 2014 to its lowest level since early 2013 amid concerns about a deterioration in the country’s economic outlook and investment returns, according to new research from Manulife.

Fig.1 Investor sentiment declining across all asset classes in China
Fig.1 Investor sentiment declining across all asset classes in China

The Manulife Investor Sentiment Index* for China fell 12 points during the quarter from 23 to 11, the lowest level for the mainland since the Index was initiated at the start of 2013. The sharp decline seen in China was, however, offset by improved sentiment elsewhere in the region leaving the overall regional index for Asiaunchanged at 24, one point above the US index which was also unchanged quarter on quarter[1].

[1] John Hancock Investor Sentiment Index, June 2014

Investor sentiment in China was down across the board – all six of the asset classes covered in the index posted marked declines. The sharpest falls related to stocks (down19 to -4) and mutual funds (down 22 points to 15). Sentiment towards real estate continued to fall (down 5 to -8), while that towards investors’ own home also hit its lowest level, although at 8 points (down 6) it remained in mildly positive territory.

In stark contrast, investor sentiment in the U.S., the world’s largest economy, was far higher towards mutual funds (49), stocks (46) and property (own home 58, real estate 49), and very negative towards cash (-52) and bonds (-15), keeping the overall American investor sentiment index (at 23) close to the Asia indicator.

“This survey was carried out after several near credit defaults in China which raised concern over the potential for a destabilizing credit event in the ‘shadow banking’ sector. We believe that this, combined with the renminbi’s depreciation in the first five months of the year, a property market slowdown and a string of worrisome economic indicators, which included five months of weak manufacturing PMI figures[2], has led to lower sentiment among investors in China,” said Endre Pedersen, Senior Managing Director, Fixed Income, Manulife Asset Management.

[2] Manufacturing Purchasing Managers’ Index (PMI) fell below 50 in January and troughed in March before recovering to 50.7 for June (numbers over 50 indicate expansion). HSBC Emerging Markets PMI, 1 July 2014.

Regional Investor Sentiment About China’s Growth Outlook Still Very Positive

While domestic investor sentiment in China towards their own market declined, their concerns were not mirrored by most investors overseas. Of the individual markets, China was the clear standout among investors, with those in Indonesia, Malaysia, the Philippines, Singapore, Hong Kong and Taiwan, and all giving China high marks as a market in which to invest (see Fig. 2) – the latter four rating it higher than the United States. By stark contrast, onlyJapan investors rated China negatively as a place to invest.

Fig.2 Asia investors give Mainland China high marks as a place to invest
Fig.2 Asia investors give Mainland China high marks as a place to invest

Within Asia, nearly two-fifths of investors (37 percent) expect China to be one of the top two fastest growing economies in the next two years, by far investors’ top choice, and ahead of the next-favored market, Japan (16), followed by Singapore and India (15), and South Korea (9). Even in China, despite the decline in investor sentiment, investors were nonetheless optimistic about China’s growth prospects over the next two years – in fact, they were the most bullish of all.

“While China’s GDP is running slightly under the government’s full-year target of 7.5 percent, we agree with general investor sentiment that it will remain one of the fastest growing economies in the region in the coming years,” said Pedersen. “GDP growth was better than expected for the second quarter of 2014 as stimulus measures – including targeted monetary policy loosening – continue to work their way through the economy. All things considered, we expect China’s full-year GDP growth to be close to the government’s official 7.5 per cent target.

“As China shifts gears to promote domestic consumption as a foundation for more self-sustaining economic growth, reforms are likely to cause a degree of short-term economic pain. However, it should be noted that such pain in the China context likely means the continuation of relatively robust economic growth when compared to developed markets. At the same time, as China goes down this path, the broader region is expected to benefit as demand for low-value-add, highly capital intensive export industries shifts to neighboring markets which offer cost-saving advantages.”

Investor Sentiment on Japan Divided

In contrast to the generally positive views on China, investors across Asia were split on Japan. Investors in the Philippines, Indonesia and Malaysia rated Japan about the same or higher than China in terms of being a good place to invest. Investors across Greater China, however, rated Japan’s investment potential negatively. A similar pattern was evident in investors’ views of Japan’s economic growth prospects. While the three emerging South East Asia markets said they expected Japan to be at least the second fastest-growing economy over the next two years, those in Greater China were far less optimistic, variously rating India, South Korea and Singapore ahead of Japan.

“A degree of caution is warranted with regard to Japan. Some investors may be interpreting the past 18 months of relatively robust stock market conditions as evidence of underlying economic strength,” explained Pedersen. “While we acknowledge that Japan’s economic growth prospects have somewhat improved since the launch of Abenomics – the Abe administration’s economic stimulus program – recent economic data has raised questions about the sustainability of the effects. Thus, we believe it is premature to expect rapid acceleration of economic growth in Japan in the near future.”

Rising Sentiment in Singapore and Indonesia Keeps Regional Index Flat

Overall regional sentiment was flat largely because of big increases in other parts of the region, notablyIndonesia and Singapore. In Indonesia, sentiment jumped nine points to that market’s second-highest level in the survey’s series, led by big increases in sentiment towards fixed income (up 19 to 56) and equities (up 13 to 21). In Singapore, sentiment rose five points to 15, its highest level since the survey was initiated, driven by a rebound in sentiment towards investing in both primary residence (up 10 to 23) and other real estate (up 3 to -8).

For more information on the Manulife Investor Sentiment Index in Asia, please visit www.manulife-asia.com.

*About Manulife Investor Sentiment Index in Asia

Manulife’s Investor Sentiment Index in Asia is a quarterly, proprietary survey measuring and tracking investors’ views across eight markets in the region on their attitudes towards key asset classes and related issues. The Index is calculated as a net score (% of “Very good time” and “Good time” minus % of “Bad time” and “Very bad time”) for each asset class. The overall index is calculated as an average of the index figures of asset classes. A positive number means a positive sentiment, zero means a neutral sentiment, and a negative number means negative sentiment.

The Manulife ISI is based on 500 online interviews in each market of Hong Kong, China, Taiwan, Japan, andSingapore; in Malaysia, Indonesia and the Philippines it is conducted face-to-face. Respondents are middle class to affluent investors, aged 25 years and above who are the primary decision maker of financial matters in the household and currently have investment products.

The Manulife ISI is a long-established research series in North America. The Manulife ISI has been measuring investor sentiment in Canada for the past 15 years, and extended this to its John Hancock operation in the U.S. in 2011. Asset classes taken into Manulife ISI Asia calculations are stocks/equities, real estate (primary residence and other investment properties), mutual funds/unit trusts, fixed income investment and cash.

About Manulife

Manulife is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife and its subsidiaries were approximately C$637 billion (US$597 billion) as at June 30, 2014. Our group of companies operates as Manulife in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial can be found on the Internet at manulife.com.

About Manulife Asset Management

Manulife Asset Management is the global asset management arm of Manulife, providing comprehensive asset management solutions for institutional investors and investment funds in key markets around the world. This investment expertise extends across a broad range of public and private asset classes, as well as asset allocation solutions. As at June 30, 2014, assets under management for Manulife Asset Management were approximately C$300 billion (US$281 billion).

Manulife Asset Management’s public markets units have investment expertise across a broad range of asset classes including public equity and fixed income, and asset allocation strategies.  Offices with full investment capabilities are located in the United States, Canada, the United Kingdom, Japan, Hong Kong, Singapore,Taiwan, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines. In addition, Manulife Asset Management has a joint venture asset management business in China, Manulife TEDA. The public markets units of Manulife Asset Management also provide investment management services to affiliates’ retail clients through product offerings of Manulife and John Hancock. John Hancock Asset Management and Declaration Management and Research are units of Manulife Asset Management.

Additional information about Manulife Asset Management may be found at ManulifeAM.com.

Media Contact:

Saijal Patel

(852) 2202 1382

saijal_patel@manulife.com

David Norris
(852) 2202 1749
david_norris@manulife.com  

Photo – http://photos.prnasia.com/prnh/20140826/8521404760-a
Photo –
http://photos.prnasia.com/prnh/20140826/8521404760-b

Source: Manulife

Written by asiafreshnews

August 27, 2014 at 5:16 pm

Posted in Uncategorized

Singapore Investor Sentiment Hits a New High — Manulife Survey

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– Sentiment boosted by improved outlook on property, fixed income and mutual funds

– Domestic economy ranked top 3 for growth by Singapore investors

SINGAPORE /PRNewswire/ — Singapore investor sentiment rose in the second quarter of 2014 to its highest level since the launch of the Manulife Investor Sentiment Index (MISI)*, driven primarily by a more positive view of the property, fixed income and mutual fund sectors, according to the latest findings from Manulife.

Fig. 1: Singapore investor sentiment hits a new high, moving above Mainland China and Japan
Fig. 1: Singapore investor sentiment hits a new high, moving above Mainland China and Japan

Sentiment among Singapore investors rose by four points in the second quarter to 15, the highest level since the survey was launched in the first quarter of 2013. Improved sentiment towards property was the main reason, with sentiment towards primary residence up 10 points to 23 while investment property climbed out of negative territory by 13 points to 5.

“Clearly Singapore investors have recently regained quite a bit of confidence but it’s important not to lose sight of the fundamentals and still take a measured approach. It’s crucial to actively manage a diversified portfolio to guard against risk and maximize returns,” according to Naveed Irshad, President and CEO of Manulife Singapore.

The proportion of respondents who think it is a good time to invest in their own home rose to 40 percent in the second quarter (from 31 percent in the first quarter). Low interest rates, market stability and, importantly, the view that property prices have corrected to an attractive entry level for investment were key. Private residential property prices fell 1.0 percent in the second quarter of 2014, the third straight quarter of price declines[1].

Of the other asset classes in the index, fixed income (up 4 to 16) and mutual funds (up 2 to 13) also climbed to their highest levels since the survey began. Equities on the other hand showed a small decline (down 3 to 16).

Market Stability and Better Returns Attract Investors to Fixed Income and Mutual Funds

Singapore investors cited market stability and higher returns in fixed income as the main reasons for their increased optimism towards this asset class. There was also increased interest in mutual funds, with low interest rates and the improving employment situation considered key reasons for favoring this type of investment.

“The survey revealed a significant boost in sentiment towards fixed income markets in the second quarter on the back of lower yields in government bonds which resulted from a flight to quality amid uncertainty arising from the situation in Ukraine and geopolitical tension elsewhere,” said Jill Smith, Senior Managing Director with Manulife Asset Management (Singapore).

“While sentiment was buoyant towards fixed income, the survey showed that investors were less optimistic about equities, however, we expect equities to enjoy more favor going forward. In general we are optimistic about equities in developed Asian markets,” Ms. Smith added. “Furthermore, in Singapore, listed companies should continue to benefit from increased economic activity overseas.”

The improvement in overall sentiment during the quarter took Singapore above mainland China and Japan, and pulled it even further ahead of Taiwan and Hong Kong. Only in Indonesia, Malaysia and the Philippines are investors more optimistic, the survey showed.

Singaporeans Place Domestic Economy Third in the Growth Expectation Stakes

Singapore investors’ more upbeat investment sentiment extends to Singapore’s economic growth outlook. Over the next two years, they expect that only China will have faster economic growth. Just over half said they thinkChina will rank first or second for economic growth, India ranks second on 26 percent, followed by Singapore on 17 percent. Some way behind is Japan on 7 percent.

“We see the potential for positive economic growth in Singapore, China and India. Singapore’s economy is highly integrated into the global economy and in particular should continue to benefit from economic growth in other developed countries,” said Ms. Smith. “Meanwhile, we expect China’s full year GDP growth to be close to the government’s official 7.5 percent target for 2014. This is based on higher demand from Western markets plus the feed through from economic stimulus measures implemented in the first half. India’s new government is widely expected to implement economic reforms which will lay a foundation for renewed long-term growth.”

Singapore investors are also very optimistic about investing domestically, with sentiment towards Singapore on 28 points, just behind China on 33 points, but well ahead of Japan on 12 points.

On a regional basis, Singapore investors show a preference for emerging Asian markets (38 points) as a place to invest compared to developed markets in Asia (31 points). They show much less interest in investing in North America (9 points), and emerging and developed European markets (both 5 points), while sentiment towards investing in the Middle East and North Africa is the weakest (at 3 points).

For more findings and related information from the Manulife Investor Sentiment Index in Asia, please visit http://www.manulife-asia.com.

*About Manulife Investor Sentiment Index in Asia

Manulife’s Investor Sentiment Index in Asia is a quarterly, proprietary survey measuring and tracking investors’ views across eight markets in the region on their attitudes towards key asset classes and related issues. The Index is calculated as a net score (% of “Very good time” and “Good time” minus % of “Bad time” and “Very bad time”) for each asset class. The overall index is calculated as an average of the index figures of asset classes. A positive number means a positive sentiment, zero means a neutral sentiment, and a negative number means negative sentiment.

The Manulife ISI is based on 500 online interviews in each market of Hong Kong, mainland China, Taiwan,Japan, and Singapore; in Malaysia, Indonesia and the Philippines it is conducted face-to-face. Respondents are middle class to affluent investors, aged 25 years and above who are the primary decision maker of financial matters in the household and currently have investment products.

The Manulife ISI is a long-established research series in North America. The Manulife ISI has been measuring investor sentiment in Canada for the past 15 years, and extended this to its John Hancock operation in the U.S. in 2011. Asset classes taken into Manulife ISI Asia calculations are stocks/equities, real estate (primary residence and other investment properties), mutual funds/unit trusts, fixed income investment and cash.

About Manulife

Manulife is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife and its subsidiaries were approximately C$637 billion (US$597 billion) as at June 30, 2014. Our group of companies operates as Manulife in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial can be found on the Internet at manulife.com.

About Manulife Asset Management

Manulife Asset Management is the global asset management arm of Manulife, providing comprehensive asset management solutions for institutional investors and investment funds in key markets around the world. This investment expertise extends across a broad range of public and private asset classes, as well as asset allocation solutions. As at June 30, 2014, assets under management for Manulife Asset Management were approximately C$300 billion (US$281 billion).

Manulife Asset Management’s public markets units have investment expertise across a broad range of asset classes including public equity and fixed income, and asset allocation strategies. Offices with full investment capabilities are located in the United States, Canada, the United Kingdom, Japan, Hong Kong, Singapore,Taiwan, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines. In addition, Manulife Asset Management has a joint venture asset management business in mainland China, Manulife TEDA. The public markets units of Manulife Asset Management also provide investment management services to affiliates’ retail clients through product offerings of Manulife and John Hancock. John Hancock Asset Management and Declaration Management and Research are units of Manulife Asset Management.

Additional information about Manulife Asset Management may be found at ManulifeAM.com.

Media Contact:

Cindy Cheng
Manulife (Singapore) Pte Ltd
+65-6833-8162
cindy_cheng_AC@manulife.com

[1] Urban Redevelopment Authority, Singapore (2nd Quarter 2014 Real Estate Statistics)

Photo – http://photos.prnasia.com/prnh/20140825/8521404759

 

Source: Manulife

Written by asiafreshnews

August 27, 2014 at 4:57 pm

Posted in Uncategorized

“My pension won’t cover the bills,” Say Asia Investors — Manulife Survey

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— Almost 9-in-10 investors in Hong Kong and Japan lack confidence in mandatory pensions
— Lack of confidence leads to calls for change in the system
— Only one-in-five Asian investors buy optional retirement plans
— Asia home to the ‘DIY Investor’, with majority missing out on professional advice

HONG KONG /PRNewswire/ — Asian investors don’t believe their mandatory pensions will be sufficient to cover their post-retirement expenses, and would like to see a raft of changes made to the pension system, according to new research from Manulife[1].

Fig. 1 Many Asia investors lack confidence in their mandatory pensions
Fig. 1 Many Asia investors lack confidence in their mandatory pensions

Although pensions are expected to be a top-three source of retirement income, when investors were asked if they were confident that their mandatory pension would be sufficient to satisfy their retirement needs, only 38 percent could answer with a definite “yes”.  The top reason for their lack of confidence was concern the savings from the plan would not be enough to cover their retirement expenses (43 percent). Investors are also worried that investment returns will be too low and that they are unable to predict what they will get from their plans on retirement.

Notable is the fact that where reliance on a mandatory retirement scheme is highest, confidence is lowest. InHong Kong and Taiwan, investors expect state or employer pensions to account for 18 percent of retirement income, while in mainland China and Japan it’s even higher at 30 percent and 31 percent respectively. But with dependence comes insecurity. Almost nine-in-ten investors in Hong Kong and Japan say they lack confidence in their mandatory pensions. In Taiwan the figure is 7-in-10, and even in mainland China, where there’s a strong heritage of state support for those in retirement, almost three-in-five lack confidence.

Investors Call for Changes to the Pension System

Calls for enhancements to the mandatory pension system are however shared Asia-wide. The top request from survey respondents was for more education on retirement planning (65 percent). Other changes requested were for greater flexibility on withdrawing funds before retirement and a wider range of investment choices. Investors also showed a strong preference for the contribution level to be raised, but said they felt the onus should be on the government or employer to contribute more to their pension plan (60 percent) as opposed to themselves (30 percent)

“Mandatory pensions are often investors’ first experience of forced saving for the future, so there’s a learning process in order to understand the features and benefits of their mandatory plan,” said Robert A. Cook, President and CEO, Manulife Asia. “The fact that investors recognize they need more education on retirement planning is a good thing. We encourage all investors to take greater personal responsibility for their own retirement and plan for other sources of income that will support them. Government pensions are a good start, but as investors know, they won’t be enough.”

Few Asia Investors Buy Optional Pension Plans  

Investors’ lack of enthusiasm is even more apparent in the case of private pensions, with only a fifth of Asiainvestors saying they’ve bought an optional pension or retirement plan.

Instead Asia investors expect to turn to other sources of income during their retirement, including savings (26 percent) and returns from other investments such as property (16 percent). However, the survey also shows that Asian investors aren’t managing their portfolios in a way that will generate the returns they need. Just over a third say they review their investment portfolio once a quarter, and changes to portfolio allocation are rare.

“The relatively low ownership of optional pension plans and the sense that government plans won’t be enough sends investors in search of other sources of retirement income,” said Donna Cotter, Head of Wealth Management for Manulife Financial in Asia. “But investors need to be sure that the alternative sources they are relying on will in fact generate the returns they expect, that the level of risk involved is not too high, and that they’re managing a diversified portfolio that will meet their needs.”

DIY Financial Planning Popular; Percentage Seeking Industry Advice Half that of US 

Asia investors express concern about their aptitude when it comes to retirement planning, with more than half (55 percent) admitting that they don’t understand their government pension plan, however, only 25 percent seek advice from a professional financial advisor — just half the level seen in the United States.[2]  The majority (60 percent) simply prefer to manage their own investments and miss out on input from industry professionals, such as financial advisers, insurance agents or bank staff.

The findings show that Japan has the biggest percentage of do-it-yourself investors (76 percent), with Indonesia,Malaysia and Taiwan all above 50 percent. Conversely almost three-in-five investors in the region rely on family, friends and colleagues for their financial planning advice, while just under half use mass media.

“As with a lot of DIY, DIY financial planning makes good sense  when you have the right knowledge, tools and time to dedicate to it, but if not, you can end up with a result that isn’t what you hoped for or that underperforms,” said Donna Cotter, Head of Wealth Management for Manulife Financial in Asia. “Investors have variable levels of financial knowledge and often limited exposure to the various investment options available to them. This creates a greater risk of getting calculations wrong or of overlooking an investment product that could be the perfect fit. Taking the time to check thoroughly with professionals is time well spent.”

For more information on the Manulife Investor Sentiment Index in Asia, please visit www.manulife-asia.com.

*About Manulife Investor Sentiment Index in Asia

Manulife’s Investor Sentiment Index in Asia is a quarterly, proprietary survey measuring and tracking investors’ views across eight markets in the region on their attitudes towards key asset classes and related issues. The Index is calculated as a net score (% of “Very good time” and “Good time” minus % of “Bad time” and “Very bad time”) for each asset class. The overall index is calculated as an average of the index figures of asset classes. A positive number means a positive sentiment, zero means a neutral sentiment, and a negative number means negative sentiment.

The Manulife ISI is based on 500 online interviews in each market of Hong Kong, China, Taiwan, Japan, andSingapore; in Malaysia, Indonesia and the Philippines it is conducted face-to-face. Respondents are middle class to affluent investors, aged 25 years and above who are the primary decision maker of financial matters in the household and currently have investment products.

The Manulife ISI is a long-established research series in North America. The Manulife ISI has been measuring investor sentiment in Canada for the past 15 years, and extended this to its John Hancock operation in the U.S. in 2011. Asset classes taken into Manulife ISI Asia calculations are stocks/equities, real estate (primary residence and other investment properties), mutual funds/unit trusts, fixed income investment and cash.

About Manulife

Manulife is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife and its subsidiaries were approximately C$637 billion (US$597 billion) as at June 30, 2014. Our group of companies operates as Manulife in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial can be found on the Internet at manulife.com.

Media Contact:

Saijal Patel
(852) 2202 1382
saijal_patel@manulife.com

David Norris
(852) 2202 1749
david_norris@manulife.com

 

[1]

Manulife Investor Sentiment Index, Q2 2014.

[2]

Manulife Investor Sentiment Index, Q1 2013

Photo – http://photos.prnasia.com/prnh/20140826/8521404761

Source: Manulife

Written by asiafreshnews

August 27, 2014 at 3:20 pm

Posted in Uncategorized