MANULIFE FINANCIAL CORPORATION 
By Indonesians have less confidence in investment
Indonesia investor sentiment index declined compared to last quarter, but is still second highest in Asia
Sentiment towards stocks and mutual funds decreased significantly, negating the gains experienced in the previous quarter
Jakarta - The Manulife Investor Sentiment Index for Indonesia (Manulife ISI) indicates a downward trend in investor sentiment in the country, consistent with the other territories surveyed, including Japan, Taiwan and Hong Kong. In Asia, the overall index also decreased.
"The survey findings underline the anxiety felt by investors around the region in terms of economy, markets and employment. People are sitting on their hands, unsure what to do," said Robert A. Cook, President and CEO of Manulife Financial in Asia. "The survey is clear that Asia investors aren't looking for excitement; they want secure and steady investment returns. From their perspective that makes a lot of sense, particularly when saving for the longterm."
Sentiment towards investment in stocks/equities and mutual funds saw the biggest declines, moving into negative territory, at -20 and -14 respectively. Attitudes towards investment property also fell. This negative sentiment translated into lower holdings for equities and property and saw investors shift into precious metals. In another insight into Indonesia investors, the Manulife ISI highlighted that although there is a gradual declining trend in sentiment towards cash (falling to 85 this quarter from 89 in the last quarter) and fewer investors claimed to hold cash this quarter, the proportion of cash/deposits in investors' portfolios increased significantly from 28 per cent last quarter to 42 per cent this quarter. Yet, 64 per cent of Indonesian respondents still feel that they do not hold enough cash.
The main reason cited for holding cash is to cover day-to-day and unexpected expenses (18 per cent of total cash holdings) and to save for children's education (also 18 per cent). The next largest cash holding is for retirement savings/income, at 17 per cent. The remainder is held for other medium to long-term goals such as: saving for future medical expenses, saving for a home purchase, and saving for other major purchases/expenses (excluding a home).
The past quarter saw further economic adjustments by the Indonesian government in response to economic challenges. The Bank of Indonesia has predicted a moderate decrease in economic growth throughout 2013 to between 5.5 and 5.9 per cent, from earlier estimates of between 5.9 and 6.2 per cent. Slower growth and the past fuel price hike translate to lower sentiment towards stock/equities and mutual funds/unit trusts. As a result, a higher proportion of investors' portfolios is being allocated to cash.
"Inflation and tax undercut the value of money so holding too much cash is not desirable," said Putut Andanawarih, Director of Business Development, PT Manulife Asset Management Indonesia. "Most investment is a long-term effort aiming for long-term gains, and while we brace for economic uncertainties, we still need to think about the future" he continued. "Manulife is committed to providing not only education to help investors achieve their long term goals, but also to facilitating a change of mindset and investment behavior. We hope that through these quarterly surveys, we can understand better what is currently happening with investors and take the right steps forward to more secure retirement futures."
Manulife Investor Sentiment Index - Key findings:
Indonesia investor sentiment plunged in Q3, declines were seen particularly for stocks/equities and mutual funds/unit trusts
The Indonesia investment sentiment index stood at 38 in Q3 (down from 60 in Q2), but Indonesia is the secondmost positive of the territories surveyed. Only Malaysia is more positive. China, Singapore, Japan, Taiwan and Hong Kong are less positive.
Overall, the Asia index declined to 15 from 21 in Q2, due to concerns about the tapering of the US Federal Reserve quantitative easing program, equity market volatility and property.
Willingness to invest
Although investment sentiment declined overall, respondents are still open to the idea of investment citing that they would invest more if the investment offered steady, modest returns, guaranteed income and/or capital guarantees (in declining order of priority).
Indonesia respondents say they would be willing to move their cash into gold, real estate for investment, insurance and time deposits with low but guaranteed interest.
Optimism to achieve financial goals
Most Indonesia respondents (64 per cent) feel that they are ahead of schedule or on-track to achieve their financial goals, while around 30 per cent of respondents think that although they are currently behind schedule they will likely catch-up.
To achieve their financial goals, most respondents cite that they will save a certain amount of money regularly and work more to increase income.
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About Manulife Investor Sentiment Index in Asia
Manulife's Investor Sentiment Index (MISI) in Asia is a quarterly, proprietary survey measuring and tracking investors' views across seven markets in the region on their attitudes towards key asset classes and related issues.The Manulife ISI is based on 500 online interviews in each market of Hong Kong, China, Taiwan, Japan, and Singapore; in Malaysia and Indonesia 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. Manulife ISI has been measuring investor sentiment in Canada for the past 13 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 or other investment properties), mutual funds/unit trusts, fixed income investment and cash.
About Manulife Financial
Manulife Financial 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 Financial and its subsidiaries were C$574.6 billion (US$558.7 billion) as at September 30, 2013. The Company operates as Manulife Financial 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 Financial can be found on the Internet at www.manulife.com.
About Manulife Asset Management
Manulife Asset Management is the global asset management arm of Manulife Financial, 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, private, and alternative asset classes, as well as asset allocation solutions. As at September 30, 2013, assets under management for Manulife Asset Management were C$265 billion (US $258 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 Contact:
Rizky Juanita
AzuzPT AsuransiJiwa Manulife Indonesia
Tel: (+6221) 2555 7788
Fax: (+6221) 25552278
Communication_id@manulife.comAngelin Sumendap
FleishmanHillard
Mobile +62 811 8451161
Office: 62-21-831-7770 ext: 116
angelin.sumendap@fleishman.comInvestor sentiment
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