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A man wearing a face mask walks past an electronic board showing the Hong Kong share index. Photo: AP

Financial confidence is improving among ‘rising affluent’ Hongkongers, according to Charles Schwab survey

  • Survey indicates the highest level of financial well-being in three years according to a set of criteria: Charles Schwab
  • Respondents also reported increased investment amounts and a higher risk tolerance this year

Confidence about personal finances is growing among affluent Hongkongers, according to a survey by US brokerage Charles Schwab, with respondents turning to more aggressive investment strategies as the economy recovers from the pandemic-induced recession.

An index tracking the financial well-being of this group of “rising affluent” has been steadily increasing since 2019 based on a set of criteria, the survey published on Tuesday showed, while a confidence sub-index reached the highest level in three years as fewer people cited Covid-19 as a primary concern.

“It’s indicative of things being in the right direction,” said Michael Fong, managing director at Charles Schwab’s unit in Hong Kong. “Because it’s showing the fading effect of Covid-19, and hence, the effect of investors having a bit more confidence in the market and hence increasing their investment amounts.”

The brokerage, which manages almost US$8 trillion of clients’ money, commissioned Nielsen to conduct an online survey from September 17 to October 7. It asked 1,020 people in Hong Kong aged 18 to 65 earning between HK$20,000 and HK$80,000 a month, the city’s so-called “rising affluent.”

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Compared with last year, 5.4 per cent more respondents replied that they had satisfaction with their financial status, and 2.5 per cent more believed they have better financial growth prospects. Stable household income was the number one contributor to higher confidence.

Hong Kong’s economy is set to grow 6.4 per cent in 2021, the government said last month. That figure would put growth at the upper end of the official forecast of between 5.5 per cent and 6.5 per cent, while the prediction for underlying inflation was lowered to 0.7 per cent from 1 per cent.

Some 6.8 per cent more respondents shifted their investment risk tolerance to progressive or aggressive this year, according to the survey. About 11 per cent of respondents raised their monthly investment amount since the onset of Covid-19, versus 8 per cent last year.

Among the preferred products for increased investment were funds, real estate, bonds and ETFs. Funds and real estate had the largest increase in portfolio representation from last year, up 6.4 per cent and 5.3 per cent, respectively.

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Additionally, 32.5 per cent of respondents increased the proportion of their long-term investments over last year, the survey showed. Fewer people in the group said their personal finances were affected by Covid-19 or cited the virus as a primary concern, it said, suggesting the impact of Covid-19 is fading.

Since the survey ended, the Omicron variant of Covid-19 has emerged, with two more cases recorded in Hong Kong on Monday, bringing the total to seven.

“The emergence of Omicron may not necessarily lead to a significant decline in investment confidence,” said Kenny Ng, a securities strategist at Everbright Sun Hung Kai. “We have not seen Omicron bring great harm to the global economy for the time being, and the economy is still recovering. [It may] have an impact on the global supply chain, which in turn will push up asset prices.”

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