Shift to more risky investments cited

BY MARIA ELOISA I. CALDERON, BusinessWorld Senior Reporter ASIA’S ROBUST economic growth and improving capital markets have prompted an increase in investor appetite for risk — a trend also seen in the Philippines at least in the past five years, British banking giant HSBC said Wednesday. Nicholas G. Winsor, visiting HSBC head of personal financial services for Asia Pacific, cited a rising proportion of funds moving away from safe deposit products to riskier and high-yielding investment instruments, such as equities and mutual funds. In the case of the Philippines, Mr. Winsor pegged the mix at 75:25 in favor of savings and time deposits, an improvement from the nearly nil investment in stocks and other investment tools a decade ago. But Filipino investors are still relatively conservative compared with their counterparts in Singapore and the US, which at a 50:50 investment blend showed a more "adventurous" attitude towards risk, Mr. Winsor noted. "The trend is from very conservative to a balanced [risk appetite]. And we now see [some] movement towards [being] adventurous," said Suresh Nanoo, HSBC’s newly appointed head of personal financial services for the Philippines. The low interest rate regime could be partly the reason for the shift in risk appetite, as depositors get less for their funds parked in banks, Mr. Nanoo said. He pointed out, however, that Asia’s rosy economic prospects would continue to support expectations of a bull run in the stock and mutual fund markets, which should attract investors. This should be true even amid the prevailing financial market turmoil brought about by troubles in the US housing market, Mr. Winsor said. "Markets have been volatile... but our advice is that when the market collapses by 10% to 15%, that’s not the time to sell but an opportunity to invest more," he added. "I’m very bullish in Asian markets. Think long-term. Stay the course. The returns are extremely good. It will outpace growth in developed markets," Mr. Winsor added. Patrick Cheng, HSBC senior vice-president for wealth management, said the region’s developing capital markets have given investors a wide array of high-yielding assets other than bank deposits. "As new products come in, investors have more choice. Certainly, if I go back five years ago, there has been a growing range of products customers can get into," he said.