Investors’ risk appetite slowly returning: Poll

THE financial market rebound has put a spring in the step of Singaporeans. They are now showing a greater willingness to take risks with their money.

Investors who had sought refuge in cash and steady yield products like bonds are now looking for higher returns and ways to better grow their wealth, according to a new Citibank survey.

It found that 44 per cent of people who stopped investing in the midst of the economic crisis have now either resumed investment activity or are open to it once the right opportunity arises.

A further 36 per cent of the 400 respondents to the online poll conducted in October last year said they stayed invested throughout the meltdown, while around 20 per cent continue to hold their savings in cash.

The survey findings indicated that for current investors or those open to investing, there appears to be a return in risk appetite.

Shares were the preferred investment for this group, with 54 per cent opting for stocks as part of their portfolios while 28 per cent picked mutual funds or unit trusts.

Lower-risk instruments such as bonds and fixed deposits attracted 19 per cent each. About 20 per cent indicated they had considered buying an investment property.

‘With confidence and stability returning to markets, there is a discernible increase in willingness amongst investors to assume a little more risk,’ said Mr Shrikant Bhat, Citibank Singapore’s head of wealth management.

At the same time, the willingness to invest was also balanced with greater caution, the survey found.

About 40 per cent of respondents said they were a lot more cautious while 42 per cent indicated they were a little more cautious in their investment decisions.

Mr Bhat noted that investors are asking a lot more questions about the products they buy and are making more informed investment decisions.

‘They are also more likely to view their investments within the framework of a holistic portfolio over a longer-term horizon,’ he said.

Financial advisers say the survey bears out what they are seeing on the ground, with investors turning more positive with the better economic outlook.

‘We are getting more calls from clients who are looking to invest,’ said Mr Sani Hamid, director of wealth management at Financial Alliance.

The return of risk appetite is, however, gradual. ‘There is still a lot of retail money sitting on the sidelines which has not come back yet,’ Mr Sani added.

Ms Carol Seah, chief executive of Wynnes Family Office, said some clients are now more cautious, while at the same time more active in their investments because they are becoming ‘more aware’ of what is going on in the aftermath of all the volatility during the financial crisis.

The Citi Fin-Q Survey also showed that the top three financial concerns of Singapore residents are rebuilding their savings, meeting monthly expenses and greater retirement savings.

Source: Straits Times, 5 Jan 2010