More rich Malaysians feel ‘wealthier’ in 2H 2009

MORE affluent Malaysians say they are wealthier now compared to six months ago, revealed the HSBC Affluent Asian Tracker, a survey conducted by Nielsen for the HSBC Group.

The survey reported nearly a double increase (55%) in Malaysians’ net worth for the second half of the year compared to 35% earlier this year.

Regionally, mainland China (70%) leads the wealth surge in Asia with a reported rise in net worth as compared to 46% six months ago.

While 89% of Malaysian respondents gained wealth through employment, 56% of their income is spent on daily and recurring expenses with 26% committed towards savings, insurance and investment, an increase of 3% compared to the previous six months.

"Malaysia’s workforce is powering the country’s affluent who are fast becoming savvy about growing and managing their newly-earned wealth," said HSBC Bank Malaysia Berhad personal financial services general manager Lim Eng Seong (pix).

"Riding on Asia’s recovery and improved market sentiment, the affluent in the country are regaining their confidence as investors are providing momentum towards a more robust wealth management market in Malaysia," said Lim.

According to the survey, 50% of Malaysian respondents said they were willing to increase their investments with half the respondents planning to invest in direct stocks and another half in unit trusts.

Most of the respondents are moderate risk takers and will not change their risk appetite in the next six months.

In asset holding, most respondents preferred savings and unit trust (73%), properties (65%) and life insurance (61%).

While the majority of Asian respondents felt that Greater China is the top potential investment market, about 47% of Malaysian respondents felt that Asia Pacific was a better option and 35% have no plans to invest in overseas funds or equities.

About 62% of Malaysian respondents said they are most likely to make a new investment, increase investment or re-allocate funds with extra income and, according to the survey’s investment risk index, most Malaysians are leaning towards more secure long-term investment products.

Lim said the growing affluence is the key driver for investment activity and diversification of asset holdings. "Whilst market sentiment will continue to remain an important driver, other factors will influence the psyche of the affluent Malaysian investor," he said.

He said the survey shows that advice from independent financial advisers (53%), financial media (40%), friends (29%), banks (28%) and family (27%) will play a key role in shaping their investment portfolio.

"Affluent Malaysians will increasingly become sophisticated investors as they combine self-knowledge with professional advice. Asia Pacific and Greater China are the most attractive markets for many affluent Asians suggesting that wealth created in Asia will continue to be reinvested within the region," said Lim.

The survey also showed that about 5% of Malaysian respondents are less cautious and less than half (38%) are choosing to maintain their spending habits. Also, more Malaysians (44%) prefer to spend on dining out, entertainment and hobbies with 40% on travel and 36% on property.

Meanwhile, 30% of Malaysian respondents are looking to live in Australia or New Zealand, 18% in Singapore followed by 10% in United States but more than half (52%) have no plans to live abroad.

"The Malaysian diaspora will evolve into a new movement, led by the affluent who not only work and study abroad, but who now explore new wealth opportunities. It will be led by those buying a second home abroad, expanding their businesses internationally or investing offshore in multiple locations," said Lim.

"International connectivity will become increasingly important as they integrate and manage their wealth across borders. HSBC Premier provides a truly global platform to support the growing international banking needs among Asia’s affluent," he added.

The survey, which gauges the views of people in the top 10 percentile of the population by income or liquid assets, was conducted across more than 1,700 affluent individuals aged 30 to 55 in eight key markets from September to October 2009. The first wave was conducted in April and May 2009.