Bangkok--22 Apr--Aziam Burson-Marsteller
ING, the global financial services group, recently released data from its quarterly ING Investor Dashboard Survey which shows a rise of 10% in investor sentiment in Thailand for Q1 2009. The Thai index showed a modest upswing from 59 in Q4 2008 to 65 for Q1 2009 yet year-on-year the index registered a 50% fall and the index remains in the pessimistic category. Hong Kong, along with Singapore, is the most pessimistic market in Asia (ex-Japan) in Q1 2009.
The overall pan-Asia (ex-Japan) ING Investor Dashboard Sentiment Index increased to 85 for Q1 2009 from 73 for Q4 2008, despite the ongoing global financial and economic crisis. This is the first quarter-on-quarter increase in investor sentiment since the Index was introduced in Q3 2007, moving the Index from “pessimistic” back into the “neutral” category.
The ING Investor Dashboard is the first quarterly survey in the Asia Pacific region that provides a pan-Asia (ex-Japan) investor sentiment index. The survey is conducted quarterly across 13 markets* in Asia Pacific, and not only provides market insights on investor attitude and outlook but also allows each market to be benchmarked and tracked against the overall investor sentiment across Asia using the pan-Asia index.
Thai investors’ views
Thai investors remain pessimistic, with 21% of Thai investors saying the local economy is in recession and 47% saying it is in a depression. Their views on the domestic economy and financial situation also remain negative.
Thai investors’ view
Q1 09
Q4 08
Economic situation deteriorated
76%
88%
Personal financial situation deteriorated
41%
52%
* The survey was conducted across 13 markets in Asia Pacific: Hong Kong, China, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Japan, Australia and New Zealand. The pan-Asia investor sentiment index includes all Asia markets and excludes Japan, Australia and New Zealand.
Thai investors’ view on following quarter
Q1 09
Q4 08
Economic situation will deteriorate
57%
77%
Personal financial situation will deteriorate
38%
38%
Key concerns affecting their investment decisions include the worsening US economy (13%) and state of the domestic economy (61%). 63% of Thai investors are concerned about their job security, an increase of 8% from Q4 2008.
Thailand’s property market, a key indicator of the market, fell marginally in the last quarter, with 60% of Thai investors believing that residential real estate prices will decline in Q2 2009, indicating further expectation of volatility in the property market.
Commenting on the results, Mr. Maris Tarab, Chief Executive Officer, ING Funds (Thailand) Limited, said, “While it is encouraging to see that a majority of Thai investors are less bearish, the upturn in sentiment in the current quarter is relatively modest and could be undermined by further economic deterioration which may result from more job losses and weakened foreign earnings from a drop in tourism, a major source of foreign exchange and employment. We are also not very optimistic that the current government can keep its pledge to maintain positive economic growth for the year, especially given the negative fallout from the ongoing political conflicts which show no clear signs of abating in a meaningful way and are adversely impacting consumer confidence.”
Thai investor strategies
Thai investors maintain their low-risk investment strategies from last quarter despite 52% believing that the current interest rate is too low. Cash, gold, local stocks and local residential real estate have remained popular with Thai investors as investment tools.
? 99% of Thai investors held on to cash in Q1 2009
? 45% invested in gold in Q1 2009 compared to 50% in Q4 2008
? 39% invested in local stocks in Q1 2009 compared to 20% in Q4 2008
? 8% invested in foreign currency in Q1 2009 compared to 8% in Q4 2008
? 37% invested in local residential real estate (for investment) in Q1 2009 compared to 7% in Q4 2008
Moving into Q2 2009, 11% of investors say they will hold more cash/deposits in Q2 2009, 5% say they will invest more in gold, and 2% say they will invest in local residential real estate possibly due to expectation of lower property prices.
Maris added, “Our new product launches throughout the first half of this year will focus on low risk products, mainly lock up maturity money market funds such as ING Thai ISF 12M1 Fund and ING Thai ISF 12M2 Fund which will have initial public offerings during 16 - 23 April 2009 and 23-30 April 2009. These funds will invest in fixed income
instruments of Korean State Enterprise and fully hedge on currency into Thai Baht. Investors can enjoy an expected return that is higher than the 1 year fixed deposit of local banks."
China Helps Drive Investor Sentiment in Asia
Asia’s twin engines of growth, China and India, drive investor sentiment in the region with their strong upswing in Q1 2009 investor sentiment index scores. Despite China’s index being down from its Q1 2008 score, the upswing in investor sentiment in Q1 2009 indicates local investors are confident China’s strong domestic economy will enable them to withstand the global economic downturn.
Markets
Q1 09 Index
Q4 08
Index
Q1 08
Index
China
124
103
136
shina'ir strong domestic economieal estate nt strategies from last quarter to continue so in Q2 09and Taiwan.ortage)ndonesia)ast(The current Q1 2009 GDP forecast by ING for China is at 7%.)
In China, 71% of investors say the government’s 4 trillion-yuan two-year economic stimulus package to boost growth and domestic demand has a positive impact on the local economy. Consequently, investors also appear to have reacted positively in Q1 2009 and continue to have a positive outlook on the economic situation for Q2 2009.
China investors’ view
Q1 09
Q4 08
Economic situation improved
42%
22%
Return on investments increased
53%
29%
Economic situation will improve in Q2 09
56%
50%
Commenting on these China focused results, Mr. Alan Harden, CEO of ING Investment Management Asia/Pacific said, “China and India have always been key driving economies in Asia. In general, there is confidence the Chinese government will continue to step in to help support the economy where necessary. The recent economic stimulus package, is a good example and, coupled with a strong stock market it is not surprising to see investor confidence rise. Bank loan growth in China has picked up, the Purchasing Managers’ Index has risen above 50, and we believe there is evidence that the consumer is buying houses and automobiles. All of this is positive and the market remains buoyant.”
Investor optimism in China also appears to have had a “spill-over effect” on Taiwan, possibly driven by optimism about improved cross-straits relations between China and the Taiwanese government. Taiwan investor sentiment increased 25% to 95 for Q1 2009 from 76 for Q4 2008.
Harden concluded, “Not surprisingly the global financial and economic crisis is not something that China and India, the two growth engines in Asia, can solve alone. Many Asian governments have put in place good measures to ride out the current crisis but until the US and Europe start to recover, Asia will have to take a prudent approach in dealing with market developments.”
For detailed (high-resolution) data charts on the ING Investor Dashboard Sentiment Index, please download the results presentation from: http://www.ing.asia/investor_dashboard
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