More than half of Singapore investors have turned more optimistic about investment opportunities and could return to the stock market in a big way this year, a recent poll indicates.
And nearly three-quarters of investors - 73 per cent of those polled - believe equities will do well this year, according to Schroders Global Investment Trends Report.
This compares favourably with the global scenario, where some 48 per cent of investors are more upbeat over investment prospects this year than they were last year.
"Investors intend to return to the market in great numbers this year and see opportunities for growth, notably in equities and in Asia," said Schroder Investment Management (Singapore) managing director Susan Soh.
Yet, they are certainly not throwing caution to the wind. There appears to be a disconnect between their optimism over equities and how much they plan to invest in this asset class.
Only 22 per cent are planning to allocate investable funds to high-risk assets - equities - with 42 per cent opting for low-risk investments such as bonds.
One key reason is that most investors here value income generation over capital growth.
The other top asset classes which Singapore investors believe will fare well this year are gold, followed by corporate and government bonds.
But worries that weighed on investors' minds last year still persist.
"It is interesting that while investor confidence is returning, there are still concerns over key risks such as inflation and the euro zone problems," said Ms Soh.
The survey polled 518 investors in Singapore and more than 14,800 active investors across 20 countries in Europe, Asia and the United States.
The chief concern among investors - raised by more than 48 per cent of them - is rising inflation while other key worries include the persistent euro zone debt woes and a weak or prolonged global economic recovery.
In terms of investment budget, Singapore investors are looking to invest close to $80,000 this year on average.
Just under half, or 45 per cent, are planning to invest between $16,000 and $50,000.
More than a quarter are looking to invest $100,000 or more.
Most Singapore investors, or 65 per cent, prefer to invest in the domestic market as they believe it has the best growth potential in the region.
Among the developed economies in Asia, Singapore ranks third in terms of the highest number of investors who have faith in their own markets, with Indonesia topping the list with 86 per cent, followed by Thailand with 70 per cent.
Globally, the home bias stands at 80 per cent among US investors, 55 per cent among Asian investors and 40 per cent among European investors - understandably the lowest given the protracted debt malaise.
The Asia-Pacific region is the most attractive to investors and the pick for 52 per cent of Asian investors and 42 per cent of European investors.
Among Singapore investors, 62 per cent favour this region in terms of rosy investment prospects.
"The findings show that investor sentiment is changing globally with a growing consensus among investors that the global recovery is gathering pace, though at different rates around the world," said Ms Soh.
"With the growing investment appetite, we believe 2013 could be the watershed year in the journey back to a more robust global investment environment," she added.
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