Hong Kongers regret low exposure to RMB products, says survey
17 June 2013
News, Asia, Hong Kong
By Asia Asset Management
China Construction Bank (Asia) (CCB (Asia)) announced on Friday (June 14) the findings of the CCB (Asia) RMB Wealth Management Survey. According to the survey, almost 60% of Hong Kong respondents felt they should have invested more in RMB products given the appreciation of the currency over the past three years. Despite the general opinion among the respondents that the RMB will continue its upward trend and the plan to invest more in RMB products, the survey also reveals that only about one-fifth of the respondents consider themselves familiar with RMB products, reflecting tremendous demand for professional RMB wealth management and investment services.
The survey, commissioned by CCB (Asia), was conducted by market research company Nielsen in May this year. It found that 58% of respondents agreed with the statement: “Looking back on the appreciation of RMB over the past three years, I should have invested more in RMB”, while almost 10% of the respondents showed disagreement. The currency has seen significant appreciation since the Chinese government began RMB reforms in 2005. Market data revealed that from 2010 to May 2013, the exchange rate of RMB to HK dollar increased by over 11%.
The survey also showed there was a common consensus among the respondents that the appreciation of RMB will continue. Approximately 80% of the respondents are bullish about RMB prospects, both in terms of a shorter duration of 12 months or a longer timeframe of three to five years. In the short-term, about one-third (31%) of the respondents believed that RMB will appreciate by over 5% in the coming year.
Given that the majority of the respondents believed that RMB will continue its appreciation, many of them also agreed that RMB products should be included in their investment portfolio. Over half (53%) of the respondents believed that the RMB was an effective tool to achieve the goal of capital appreciation, while 54% considered RMB products a critical component of a healthy investment portfolio.
The findings of the survey also reveal that when the respondents were asked about what kind of banking products and services they would consider using in the next 12 months, local stocks ranked first (42%), followed closely by RMB deposits (including time deposits) (41%). Meanwhile, investment appetite of the respondents for RMB bonds (19%) was also higher than that for HKD bonds (17%), reflecting the significant growth potential of the RMB bond market in Hong Kong.
The survey also shows that the penetration of the RMB products has surpassed that of foreign deposits. Among the respondents, nearly one-third (32%) and one-quarter (25%) maintained RMB savings accounts and RMB time deposit accounts respectively, while 23% and 7% of the respondents possessed savings and time deposit accounts of other foreign currencies respectively.
Despite substantial interest in holding and investing in RMB among the respondents, only 23% considered themselves to be familiar with RMB products, implying a lack of knowledge in RMB wealth management and investment among the majority of the Hong Kong people interviewed. As such, nearly two-fifths (38%) of the respondents aspired for professional advice on RMB products from wealth management experts.
As at the end of April 2013, the total amount of RMB deposits in Hong Kong reached 677.2 billion RMB, indicating the immense market potential for RMB products.
China Construction Bank (Asia) President and Chief Executive Officer Miranda Kwok said: “This survey not only gives us a better understanding of the perception and demand of RMB products among local citizens, but also confirms our belief in the emerging need for RMB wealth management services for the public. We are delighted to see that demand for RMB products continues to grow alongside with an increasing popularity of related products. We will continue to uphold our positioning as the ‘RMB Wealth Management Expert’, proactively meeting our customers’ wealth management needs and providing solutions for their inquiries, in order to bring them the opportunities and benefits of capital appreciation brought by RMB wealth management.”
Nielsen was commissioned by CCB (Asia) to conduct a survey in the form of online questionnaire in May this year. A total of 805 respondents participated in the survey, with ages ranging from 20 to 60 and a monthly personal income of HK$10,000 or above, or a household income of HK$20,000 or above. Samples were collected with gender, age, income and place of residence, reflective of the structure of the Hong Kong population.
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