Tuesday, January 5, 2010

S'pore investors more upbeat

Many are turning to high-yield equity products like stocks, mutual funds and unit trusts. -myp
Koh Hui Theng

Tue, Jan 05, 2010
my paper

SINGAPORE residents are welcoming the new year with new-found confidence, thanks to an improving economic outlook and positive market sentiments.

Instead of parking their savings in cash, many are turning to high-yield equity products like stocks, mutual funds and unit trusts - suggesting a return of risk appetite.

The third annual Citi Financial Quotient (Fin-Q) Survey 2009 - which polled 400 Singaporeans online in October - showed four in 10 who stopped investing during the financial crisis have either resumed doing so or intend to be back once the right opportunity arises.

Another four in 10 had stayed invested during the tough times.

And equity instruments top these investors' wish-list. One in two opted for stocks in their portfolios while three in 10 zoomed in on mutual funds and unit trusts.

In contrast, only one in five said they would continue to hold their savings in cash or near-cash equivalents like term deposits and Treasury bills.

Despite the robust property scene here, just one in five said they intend to buy real estate for future sale or rental yield.

If given extra cash, one in two added that they would pick stocks, shares or unit trusts to up their net worth.

Citibank (Singapore) head of wealth management Shrikant Bhat said the increased risk appetite indicates that confidence and stability are returning to the markets.

"Investors who had sought refuge in cash and steady-yield products are now seeking higher returns and ways to better grow their money," he said.

Three in five said they were quite confident about the country's economic future despite their finances being affected by the crisis.

The improved outlook resulted from across-the-board growth in 2H09, as various stimulus packages kicked into effect and risk aversion ebbed.

But he expects uneven growth this year as emerging markets and sectors like healthcare and pharmaceuticals outperform their counterparts.

Still, people seem to have learnt lessons from one of the worst recessions in history.

Despite being more willing to invest, they are proceeding with greater care.

A quarter of those polled said they are a lot more cautious about making investment decisions now, compared to a year ago.

Two in five said they are a little more cautious.

Two in five also admitted they have saved more in the past year.

Meanwhile, many are concerned about rebuilding their savings, meeting monthly expenses and accumulating greater retirement savings.

Two in five reported that their retirement savings suffered serious losses.

A vast majority, seven in 10, felt their Central Provident Funds (CPF) are insufficient for a comfortable retirement.

Of these, a quarter said that CPF will provide very little retirement income.

Almost half said their CPF will offer only some income to fund their golden years.

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