Hong Kong Investors Prefer Trading Offline

by Carla Johnson, Investors Offshore.com

16 October 2001

The Hong Kong Securities and Futures Commission (SFC) has released the findings of its Retail Investor Survey with the overwhelming conclusion that dealing offline through banks and brokerages has remained the most popular trading mode among retail investors in Hong Kong.

Although online trading has seen encouraging growth in other key financial markets, the survey says that it has not picked up despite widespread use of the Internet in the territory. Online trading was first introduced in Hong Kong in 1997 and only 10 per cent of the respondents, usually younger investors with higher education levels, have traded online since.

A statement released by the SFC explained that the survey studied the profile and investment behaviour of 1,004 retail investors who were interviewed by phone. It also examined their education needs and views on the regulatory functions performed by the SFC.

The survey also found that the investment pattern of retail investors has remained consistent over the years. Equities continue to dominate the portfolios of Hong Kong's retail investors while funds have slowly grown in popularity. Hong Kong stocks (22.5%) were ranked the most popular investment products, followed by funds (9%) and derivatives traded on exchanges in Hong Kong (3.4%).

It was discovered that retail investors have clearly moved on and want more than just stock tips - 78% wanted more information about investors' rights and responsibilities, 76% and 69% would like to know more about market malpractice and investment risks respectively.

Mr Andrew Sheng, Chairman of the SFC said: 'The SFC recognizes the importance of listening to the investors and understanding their areas of concerns. The survey helps us gauge the effectiveness of our investor protection initiatives and provides a benchmark against which the performance of the SFC is measured.'

'We firmly believe that investor education is the first important step to investor protection. Information collected in this survey will facilitate us in drawing up a strategic plan for forthcoming investor education programmes. We will also conduct similar surveys in future in order to keep ourselves up-to-date of investors' education,' he added.

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