Equity fund turnover strikes record high

PUBLISHED : Monday, 25 August, 1997, 12:00am
UPDATED : Monday, 25 August, 1997, 12:00am

The record turnover on Hong Kong's share market was not the only indicator of unprecedented interest among investors last week.

Some of the SAR's fund managers said they experienced unusually high interest in equity trusts as turnover hit a record high.

Hong Kong's biggest fund manager, Jardine Fleming, said it had noticed a 'strong upsurge' in fund inflows during last week.

JF marketing director Mike Ryder Richardson said investors had seen falls during the week as 'an opportunity to get into the market again'.

He said July and August as a whole had been very busy months amid frantic market activity - relative to the same month in previous years and to previous months this year.

Only 1993 - which he described as 'exceptionally strong' - had been a busier year, but this year was 'of that order', he said.

At one stage during the boom of 1993 and early 1994, JF had to shut its doors to business because there was a fear application forms would be processed incorrectly, Mr Ryder Richardson said.

The chairman for Asia-Pacific of Fidelity Investments, Stuart Leckie, said there were strong inflows into unit trusts, but added the rise in these flows was more gradual than was the case in the stock market.

'People who like to trade the market do so directly,' he said.

The rise in fund inflows into unit trusts was more a testimony to prudence, according to Mr Leckie, who will leave Fidelity at the end of the year to start his own funds management consultancy.

Many investors were looking to hedge out of Hong Kong by placing their money into international unit trusts, particularly in Europe and the US. 'People aren't abandoning Hong Kong, but they are hedging their risk,' he said.

On the other hand, the bulk of the inflow of funds directly into the Hong Kong market was being caused by massive buying and selling, and speculation on red chip and H-share stocks, Mr Leckie said.

LGT managing director Peter Lord said the firm had experienced an 'exceptionally good July' and things had remained 'extremely buoyant' in August.

In this context, there had been nothing out of the ordinary to report from last week amid the hectic share market trading.

As a general rule, the general mood of Hong Kong investors dictated the success of unit trusts, he said.