The J.P. Morgan announced that the J.P. Morgan Investor Confidence Index in HK moved up slightly from the previous quarter when sentiment was at its weakest.
The Index is designed to measure the outlook of retail investors in the local market over the next six months. The index rose to 98 in December from 95 in September, when it fell below its neutral level of 100 for the first time since July 2006. The December index shows that overall investor confidence in Hong Kong has stabilized although investors are still wary of the risk of a deeper economic recession in the next six months.
Hong Kong investors anticipate that the employment market may deteriorate further over the next six months, according to the survey. 44% of those surveyed expect an increase in the Hang Seng Index over the next 6 months from the current level. 39% expect the Hang Seng Index to exceed 16,000 at the end of June 2009.
The index covers six areas: Hong Kong stock market performance, the local economic environment, the local investment environment, the global economic environment, personal asset valuations, and amount of investments. Each of those index components registered an increase in the latest survey, with the exception of plans to increase investments.
Both aggressive and conservative investors continue to shift their attention from overseas to the Hong Kong market. Portfolio strategists will tell you that the high concentration of equity investments in the local market may limit the potential scope for returns when the global economy begins to recover, and also increases the risk of portfolio volatility from over-dependence on a single market. However, all portfolio management theories have been thrown out the window this time around. So much for diversification (geographic, industry, asset class, currency). Everything got clobbered.
Of course, retail investors are always the worst predictors of the market.
I don't see any real improvements until after the April final results reporting season. HK has the longest reporting period of any of the developed markets. Final results have to be reported with 3 months.
Institutional investors are sitting on their hands right now and waiting for results announcements. No one wants to buy now and finish with egg on their faces when the results come out and the company announces huge "hedging losses".
So things will be very volatile between now and then. Morgan Stanley just downgraded Hsbc with a target of 52 (was 75 now 66). The market went up 1,200 points on the first 2 days of trading to 15,500 and now has given up more than 2,000 points!
The Index is designed to measure the outlook of retail investors in the local market over the next six months. The index rose to 98 in December from 95 in September, when it fell below its neutral level of 100 for the first time since July 2006. The December index shows that overall investor confidence in Hong Kong has stabilized although investors are still wary of the risk of a deeper economic recession in the next six months.
Hong Kong investors anticipate that the employment market may deteriorate further over the next six months, according to the survey. 44% of those surveyed expect an increase in the Hang Seng Index over the next 6 months from the current level. 39% expect the Hang Seng Index to exceed 16,000 at the end of June 2009.
The index covers six areas: Hong Kong stock market performance, the local economic environment, the local investment environment, the global economic environment, personal asset valuations, and amount of investments. Each of those index components registered an increase in the latest survey, with the exception of plans to increase investments.
Both aggressive and conservative investors continue to shift their attention from overseas to the Hong Kong market. Portfolio strategists will tell you that the high concentration of equity investments in the local market may limit the potential scope for returns when the global economy begins to recover, and also increases the risk of portfolio volatility from over-dependence on a single market. However, all portfolio management theories have been thrown out the window this time around. So much for diversification (geographic, industry, asset class, currency). Everything got clobbered.
Of course, retail investors are always the worst predictors of the market.
I don't see any real improvements until after the April final results reporting season. HK has the longest reporting period of any of the developed markets. Final results have to be reported with 3 months.
Institutional investors are sitting on their hands right now and waiting for results announcements. No one wants to buy now and finish with egg on their faces when the results come out and the company announces huge "hedging losses".
So things will be very volatile between now and then. Morgan Stanley just downgraded Hsbc with a target of 52 (was 75 now 66). The market went up 1,200 points on the first 2 days of trading to 15,500 and now has given up more than 2,000 points!
No comments:
Post a Comment