HK more distrustful of financial markets

PUBLISHED : Saturday, 14 January, 2012, 12:00am
UPDATED : Saturday, 14 January, 2012, 12:00am


Hong Kong consumers had even less confidence in the financial markets in the last quarter than people on the mainland, Taiwan or Macau, but they were more optimistic about their household expenditure, according to a consumer confidence survey.

The study by six universities in the four areas showed that the consumer confidence index (CCI) for investment markets fell to 70.5 in Hong Kong, 74.9 on the mainland and 78 in Taiwan, while the figure in Macau rose slightly to 75.5 from the previous quarter. The index peak is 200, with 100 being neutral.

The figures indicate that consumers are pessimistic about their local stock markets, as the Hang Seng Index benchmark, the A-share index in Shanghai and the Taiwan Stock Exchange Weighted Index plunged 15 to 27 per cent during the past six months.

'The stock market in Hong Kong was not the worst performer last year, but Hongkongers were the most pessimistic in the region,' said Dr Geoffrey Tso, of the City University of Hong Kong. 'That's possibly because the market in the city is more closely connected with those in Europe and the United States. The ongoing European credit crisis has been a big concern for investors and consumers in the city.'

The survey also found that high inflation was worrying consumers in all the areas surveyed. The CCI index for prices was 57.4 in Hong Kong, 70.1 on the mainland, 50.7 in Taiwan and 57.7 in Macau - far below the neutral 100 points.

However, consumers in Hong Kong and the mainland believed they were capable of dealing with the financial pressures of daily expenditure. The CCI for household expenditure stood at 111.7 on the mainland and 104.2 in Hong Kong, while in Macau it was 95.5 and 70.4 in Taiwan.

The CCI statistics released yesterday are separate from those issued by the China National Statistics Bureau each quarter.

The six universities have jointly released the index since 2009. On the mainland, they are Renmin University of China, Central University of Finance and Economics and Capital University of Economics and Business. Others that take part are City University of Hong Kong, Macau University of Science and Technology and Fu Jen Catholic University in Taiwan.

The researchers poll 1,000 to 3,000 people in each region through random telephone interviews every quarter, asking for their views on economic prospects, employment, prices, quality of life, flat purchases and investments.

According to the study, people's outlook on the overall economy was pessimistic, with readings of 90.4 on the mainland, 79.3 in Hong Kong, 86.9 in Macau and 71 in Taiwan.