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Saturday, 4 July 2009

Wealthy investors still cautious, fear further price falls: Poll

By Gabriel Chen

HIGH net worth individuals are sitting on the fence because they are afraid of major price corrections, according to a new survey by Barclays Wealth and the Economist Intelligence Unit.

The report - based on a world poll of 2,100 high net worth individuals, more than 100 of whom are from Singapore - found the majority thought there were buying opportunities, but believed the risk of price falls was too high to take advantage of them.

Compiled between March and May, the data showed that 59 per cent of investors held this view in Singapore, compared with an Asia-Pacific average of 66 per cent.

Around the world, investors have questioned whether the recent 12-week rally is a prelude to the next bull market.

Many have stayed out of the stock market, fearing that the speed and severity of the downturn may lead to further market plunges.

This, despite global stock indices surging since the lows of March 9.

The MSCI index of Asia-Pacific stocks outside Japan has jumped more than 50 per cent from the March trough to late last month.

'For the average investor, they missed out on the early boom because they were too nervous,' said Barclays Wealth head of behavioural finance Greg Davis.

Private bankers agreed that the mood among wealthy investors in Singapore was still generally cautious.

'They are hesitant to jump feet first back into the market for fear of a pullback from the recent market rally - particularly so for those who missed the rally over the last few months,' said Mr Raj Sriram, RBS Coutts' head of private banking in Singapore.

Mr Rajesh Malkani, Standard Chartered Private Bank's head of South-east Asia, said that it is stepping up its communication with clients, keeping them informed of market conditions and reviewing their portfolios regularly.

This article was first published in The Straits Times.

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