Half of Singapore and Hong Kong investors believe the economy will improve in the next three months: survey

However, a global recession is expected in H1 2020.

High net worth (HNW) investors in Singapore and Hong Kong expect the global economy to improve slightly over the next three months and anticipate a China-US trade deal in the second half of 2019, according to private banking and asset management firm LGT Asia’s Investor Sentiment survey.

The survey, which canvassed more than 300 high net worth investors in Singapore and Hong Kong on their global economy and trade views, found that close to 50% of total respondents think the global economic environment will improve slightly over the coming three months with Singapore-based HNW investors being somewhat more optimistic than Hong Kong-based respondents.

“The survey results indicate that a global recession is expected in the first half of 2020, with two further rate hikes from the US Federal Reserve in the pipeline,” LGT said in a statement.

In terms of preferred equity markets, Singapore HNW investors voted highest for their home market (24%) and then Japanese equities second (21%). Hong Kong-based respondents voted highest for their home market at 37%, followed by US stocks at 19%.

Also read: Poll: 67% of Singapore and Hong Kong investors plan to invest in Chinese onshore bonds in 2019

Meanwhile, Hong Kong and Singapore-based HNW investors seemed to be generally constructive in their outlook on equity markets, the global economy and China for 2019. On the other hand, respondents were found to be somewhat bearish on the CNY.

“This might suggest that investors think that a weaker CNY could be part of the 'tool box' for the authorities in China to facilitate a soft landing,” LGT explained. “A further surprise is the high levels of cash in investor portfolios. This may suggest that whilst being generally positive on equities, investors want to have cash on hand to buy into market dips over the coming three to six months.”

Over half or 59% of respondents said they expect the CNY to depreciate against the USD over the next three to six months.

Meanwhile, 42% of respondents said they expected a US-China trade deal in the second half of 2019, with only 12% saying that a resolution may take years to come.

In terms of the property market, 78% of Singapore respondents had a neutral or positive view of local real estate. In Hong Kong, the score was slightly lower at 70%.