Retail players move from banks to funds

PUBLISHED : Friday, 10 March, 2006, 12:00am
UPDATED : Friday, 10 March, 2006, 12:00am

The number of retail investors in Hong Kong has jumped by almost 500,000, or 30 per cent, over the past two years to 2.1 million, as negligible bank interest returns prompted depositors to put their savings into bond or fund products.

Of about 5,200 people surveyed by the Securities and Futures Commission (SFC) last year, 36.8 per cent said they had invested in financial products in the preceding two years, up from 29.8 per cent in a similar survey in 2003.

The SFC estimates that 2.1 million people in Hong Kong have invested in the past two years, up by 470,000 from 2003.

Analysts attributed the rise to low interest rates. Last year, a bank deposit of $1 million earned only $10 by the end of the year - barely enough for a cup of coffee.

The SFC survey showed 18.1 per cent of respondents have invested infund products other than their Mandatory Provident Fund, almost twice the 9.8 per cent level in 2003.

Stock investment remained the most favoured option - with 28.3 per cent invesing against 23.8 per cent in 2003.

The survey also found a need for more investor education. 'It is important for all parties to play an appropriate role in increasing the financial knowledge of our retail investors,' SFC chairman Martin Wheatley said.