Indonesia Affluent Among Region’s Most Optimistic Toward Investment, Says HSBC Survey

**Affluent Indonesia, Mainlanders and Indians are youngest of Asia’s wealthy**
**63% Indonesia affluent plan to increase investment in next six month**
**There is an evolving needs of wealth management service for Indonesia’s market**
 

The majority of affluent Asians say they managed to either keep their wealth intact or grow their net worth in early 2010 compared to six months ago. The HSBC Affluent Asian Tracker survey shows that affluent Asian investors, among the youngest of the world’s wealthy, are riding on the recovery in the world’s fastest-growing markets while navigating through continued uncertainty in the West, particularly in Europe.

Indonesia affluent, at least (80%) maintain or increase their wealth compare to six months ago. Specifically, (51%) Indonesia affluent surveyed had increased their wealth, while (29%) maintain. Leading Asia’s affluent are 69 per cent of mainland Chinese respondents (vs 70 %) who reported a rise in net worth compared to six months ago, followed by Malaysia (58%). (see slide 9).

The third wave of the HSBC Affluent Asian Tracker was conducted by Nielsen for HSBC across 2,072 affluent individuals aged 18-65 in seven key markets from February to April 2010. With the last wave conducted in September to October 2009, the survey gauged the views of people in the top 10 percentile of the population by liquid assets or mortgage value. (see slide 2).

Average age of Indonesia affluent is among the youngest in the region, 39 years old; with 7 out of 10 people were marriage with kids. Affluent Mainlanders’ average age is 36, followed by Indians at 38. Hong Kong’s affluent are the oldest, at 48 years on average, and close to four in 10 (39%) are double income couples with no kids (DINKS). At least 10 per cent of affluent respondents in the region, except in Taiwan, are single. (see slide 5 & 6).

Bruno Lee, Regional Head of Wealth Management Asia-Pacific, said: "Asia's young and upwardly mobile working population is fast accumulating wealth to become this generation’s emerging affluent. Their wealth management needs are evolving as they cross over to the next life stages. In many key markets in the region, investments, particularly in local equities, are a key driver to wealth growth. Asia's new affluent, particularly in mainland China, are increasingly becoming savvy investors as they look to other asset classes and to overseas opportunities for diversification.".

Liquid assets
Across Asia, over half of liquid assets are in deposits, with affluent Indonesians holding up to 95 per cent in cash. Across Greater China (Hong Kong 44%, Taiwan 42%and mainland China 41%) and India (40%), at least 40 per cent of liquid assets held by affluent individuals are invested in equities, unit trusts and other investments. (see slide 7).

Current investments
Indonesia affluent is at the lowest in term of investment diversification compare to the rest of region. At least 7 in 10 affluent in Greater China invest in equities, with Hong Kong leading at 87 per cent, while among Indonesia affluent, only (5%) to have investment portfolio in local securities (equity). (see slide 10).

Future investments – Indonesia affluent is the most optimist
Overall, most of Asia affluent has planned to increase investment for the next six months. Compare to the previous wave in October, now we can see the number of growing, where (63% Indonesia affluent vs 51% from the previous wave) plans to increase their investment for the next six months. The number is the highest in region, followed by India (60%) and Malaysia (45%).

Along with that, (38%) Indonesia Affluent also plans to read more about investment strategies. (Increase from previous wave 9%) and 19% specifically plan to consult with advisor more frequently (increase from pervious wave 4%). Only 1% plan to reduce their investment. (see slide 11)

Mr Lee added: “Our survey shows that in general, affluent Asians remain under-invested in the full range of assets with an over-concentration of investments in stocks compared to professionally managed mutual funds. This may have to do with restrictions on the type of product and market access in individual markets. However, Asia’s new affluent are showing increased maturity as investors as they have become wary about rushing into unfamiliar investments and are fast to change investment strategies to react to market changes.”

HSBC Affluent Asian Risk Index
The survey also calculated a risk index1 to measure mentality and behaviour towards security and growth using a number of attributes. In a scale of 0-200 where 0 represents security and 200 for growth, markets tended to hover near the mean of 100 with Asia’s new affluent showing a balanced attitude towards risk compared to six months ago: Indonesia (100), India (100) and mainland China (99). The more mature markets of Taiwan (89), Malaysia (89), Singapore (82) and Hong Kong (82) show a shift to a security-oriented investment strategy. (see slide 13)

Six in 10 affluent in the Mainland (66%), India (64%) and Hong Kong (62%) have a moderate appetite for risk. More affluent individuals in Singapore (47% vs 18%) and Taiwan (36% vs 18%) increased their appetite for capital protection compared to six months ago. Affluent investors from the emerging markets of Indonesia (25%) and Malaysia (23%) show a higher propensity for risk compared to the rest of the region. (see slide 14)

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For further media enquiries please contact:
Laine Santana +852 2822 4918 lainesantana@hsbc.com
Jane Yuen +852 2822 4937 janeyuen@hsbc.com.hk
Andrew Hallatu +62 21 3040 5382 andrewhallatu@hsbc.co.id

Footnote
1: The HSBC Affluent Asian investment risk index measures propensity towards growth or security using 5 measures or attributes for each. The scores are calculated into an index from 0-200 (100 is the mean), where a higher score represents a stronger propensity towards growth and a lower score, a stronger propensity towards security. More details available in the HSBC Affluent Tracker July 2010 report attached.

Notes to editors: