For Immediate Release September 2, 2014
  • Three quarters of Hong Kong investors and nearly half of Taiwan investors hold RMB assets
  • RMB deposits most favoured in Hong Kong and Taiwan

Hong Kong - Hong Kong and Taiwan investors have strong interest in RMB assets, but they appear to have distinct preferences and attitudes towards the asset class, according to the latest Manulife Investor Sentiment Index*.

Hong Kong investors take the lead, with 77 per cent owning RMB assets or investment products compared to 45 per cent of Taiwan investors. Deposits top RMB asset ownership, with 69 per cent of Hong Kong and 36 per cent of Taiwan investors owning them, followed by RMB bonds in Hong Kong (25 per cent) and mutual funds in Taiwan (11 per cent) as the next most popular RMB assets. On average, Hong Kong investors hold an average of 1.7 RMB products, compared to 1.6 for Taiwan investors.

"The past few years have marked the continued internationalization of RMB and Hong Kong's pre-eminent position as an offshore RMB centre. With RMB on course to become a major globally traded currency, we expect the RMB asset ownership penetration in Hong Kong and Taiwan to continue to rise as a greater variety of RMB financial products are made available," said Michael Huddart, Manulife's Executive Vice President and General Manager for Greater China. 

Steve Chiu, Vice President, Investment Funds, Manulife (International) Limited also commented: "With growing pools of offshore RMB deposits both in Hong Kong and Taiwan, and as cross-border investment in Chinese equities and bonds becomes more widely available, there will be many more investment products denominated in this currency, offering more investment opportunities for investors."

Hongkongers' enthusiasm for RMB products is widespread but skewed towards deposits
When asked to indicate their sentiment towards particular RMB asset classes, RMB assets owners in Hong Kong favoured RMB deposits the most (+24), with a highly positive sentiment that almost doubles the second-most favoured product, RMB bonds (+13). Other RMB-related products, despite a positive rating, are much less favoured compared to deposits, with A-share ETFs and China-related ETFs achieving a moderately positive sentiment rating of +7, RMB securities at +5, RMB mutual funds at +3, and RMB insurance policies at +2. Even non-owners of RMB-related products in Hong Kong have quite a positive sentiment towards RMB deposits at +8.

"While we expect the RMB to revert to its appreciation trend and gain 0.5-1.0 percent over the coming 12 months, a spate of depreciation in the first half of 2014 served as a reminder that currency appreciation cannot be taken for granted as a source of return on RMB-denominated investment instruments," said Paula Chan, Senior Portfolio Manager for Fixed Income with Manulife Asset Management.

Taiwan investors show a more balanced sentiment towards RMB-related products
RMB asset owners in Taiwan, similar to those in Hong Kong, favour RMB deposits the most (+38). However, Taiwan investors show more consistent sentiment towards various classes of RMB-related products, with RMB mutual funds enjoying a rating of +24, A-share ETFs/China-related ETFs at +23, RMB bonds at +21, and RMB insurance policies at +17.

The positive sentiment towards RMB assets in both Hong Kong and Taiwan is consistent with investors' positive expectations of mainland China's growth prospects in the near future. Investors in Hong Kong (33 per cent) and Taiwan (29 per cent) believe China will have the fastest growth rate in the coming two years compared to a selection of other popular investment destinations, including South Korea, Singapore, India and Japan.

"Against this backdrop, we see opportunities to generate returns in China's RMB bond market, which has grown significantly over the past five years and is seeing increasing corporate issuance as part of a trend towards bank disintermediation," commented Ms. Chan. "With currency appreciation no longer something that can be taken for granted, we see corporate credit as a promising avenue for generating returns. Chinese credit delivers average yields in excess of developed-market issuances, but careful credit research is necessary as some issuances do not carry international credit ratings and local accounting and reporting practices are still evolving."

For more information on the Manulife Investor Sentiment Index in Hong Kong, please visit www.manulife.com.hk.

*About Manulife Investor Sentiment Index in Asia
Manulife's Investor Sentiment Index in Asia is a quarterly, proprietary survey measuring and tracking investors' views across eight markets in the region on their attitudes towards key asset classes and related issues. The Index is calculated as a net score (% of "Very good time" and "Good time" minus % of "Bad time" and "Very bad time") for each asset class. The overall index is calculated as an average of the index figures of asset classes. A positive number means a positive sentiment, zero means a neutral sentiment, and a negative number means negative sentiment.

The Manulife ISI is based on 500 online interviews in each market of Hong Kong, China, Taiwan, Japan, and Singapore; in Malaysia, Indonesia and the Philippines it is conducted face-to-face. Respondents are middle class to affluent investors, aged 25 years and above who are the primary decision maker of financial matters in the household and currently have investment products. 

The Manulife ISI is a long-established research series in North America. The Manulife ISI has been measuring investor sentiment in Canada for the past 14 years, and extended this to its John Hancock operation in the U.S. in 2011. Asset classes taken into Manulife ISI Asia calculations are stocks/equities, real estate (primary residence and other investment properties), mutual funds/unit trusts, fixed income investment and cash.

About Manulife (International) Limited
Manulife (International) Limited is a member of the Manulife group of companies.

Manulife is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife and its subsidiaries were approximately C$637 billion (HK$4,626 billion) as at June 30, 2014. Our group of companies operates as Manulife in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife can be found on the Internet at manulife.com.  

About Manulife Asset Management
Manulife Asset Management is the global asset management arm of Manulife, providing comprehensive asset management solutions for institutional investors and investment funds in key markets around the world. This investment expertise extends across a broad range of public and private asset classes, as well as asset allocation solutions. As at June 30, 2014, assets under management for Manulife Asset Management were approximately C$300 billion (US$281 billion).

Manulife Asset Management's public markets units have investment expertise across a broad range of asset classes including public equity and fixed income, and asset allocation strategies. Offices with full investment capabilities are located in the United States, Canada, the United Kingdom, Japan, Hong Kong, Singapore, Taiwan, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines. In addition, Manulife Asset Management has a joint venture asset management business in China, Manulife TEDA.

The public markets units of Manulife Asset Management also provide investment management services to affiliates' retail clients through product offerings of Manulife and John Hancock. John Hancock Asset Management and Declaration Management and Research are units of Manulife Asset Management.

Additional information about Manulife Asset Management may be found at ManulifeAM.com.

Media Contacts:
Jacqueline Kam / Crystal Tse
Manulife (International) Limited
Tel: (852) 2202 1284 / (852) 2510 3130
Fax: (852) 2234 6875
Jacqueline_tm_kam@manulife.com /
Crystal_ym_tse@manulife.com

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