INSTITUTIONAL investors remain confident in Hong Kong and its stock exchange, a survey by the exchange reveals. The survey, which also showed investors were satisfied with the exchange's services, was taken in November. It questioned 96 issuers, 23 merchant bankers and 2,541 retail investors. The survey found that local individual agency trading made up 52.8 per cent of trading, with overseas institutional agency trading and local institutional agency trading making up 20.8 per cent and 22 per cent of trading respectively. For individual members, almost all their agency trading was conducted on behalf of local individual clients. For corporate members, the share of institutional and individual trading was roughly equal. Among global investors, 90 per cent were confident about the territory as a place to invest, 65 per cent were confident in the exchange and 80 per cent were satisfied with its services. Collectively, the five key strengths of Hong Kong, according to the fund managers, were: good economic prospects, high foreign investor accessibility, high-speed trade execution, reasonable cost of trading and high availability of quality broker research. Its weaknesses were: protection of minority shareholders, insider dealing regulations, stable political environment, pace of product development and price-sensitive disclosure information. Only nine per cent of the population were found to be stock investors, 34 per cent were potential investors and 57 per cent non-potential. Reasons for not investing were: too risky, insufficient information, no spare cash, no time, no confidence in brokers, stock market not well-regulated, other investments are better and trading is too complicated. Foreign exchange was the most popular retail investment, 15 per cent of the population indulging in it. Five per cent invested in property, two per cent in gold and two per cent in warrants. According to the survey: ''The typical stock investor is male, aged 30 to 39, has completed secondary education or above, and is a white-collar worker with a personal monthly income more than $10,000.'' Only 29 per cent held more than $100,000 of stock. Half held one stock and only six per cent had five or more stocks. The stimuli for more frequent trading were; better regulation, simpler and lower-cost trading, more company information, better broking services and more new listings. Investors still believed that local stock prices were easily manipulated by large shareholders or investment funds.
