HSBC QUARTERLY SURVEY FINDS MOST FUND MANAGERS ARE NOW MORE OPTIMISTIC ABOUT ASIA-PACIFIC STOCKS

       Nine out of 10 fund managers polled in HSBC's quarterly Fund Managers Survey are holding a positive view on Asia-Pacific ex-Japan equities this quarter, up from 45 per cent last quarter. Overall, fund managers in the surฌvey are more optimistic about equiฌties as an investment class, with 50 per cent of fund managers overฌweight in the third quarter of the year from 30 per cent in the second quarter.
       Fund managers remain bullish about Greater China equities - 75 per cent this and last quarter - while 73 per cent of fund managers hold a positive view towards emerging marฌkets equities, up from 27 per cent.
       Fund managers' views on bonds shifted to neutral, 70 per cent from 20 per cent. Only 30 per cent of fund managers, down from 70 per cent last quarter, are bullish on bonds.
       The views are the least positive on cash, with a significant shift of fund managers - 57 per cent from 25 per cent - to an underweight view. No fund manager held an overweight view versus 25 per cent last quarter.
       Bruno Lee, HSBC's head of wealth management for AsiaPacific, sees improving market performance, combined with some signs of ecoฌnomic recovery especially in AsiaPacific and emerging markets, as buoying investor sentiment for equiฌties while people actively seek growth opportunities.
       "Investors remain positive about Greater China equities, given the stellar performance of the stock marฌket and positive signs of economic development in the region over the past few months."
       The quarterly HSBC survey analysed 13 of the world's leading fund management houses by their funds under management (FUM), their asset allocation views and their global money flows. The net money flow estimates are derived from movements in FUM versus index movements in the equivalent class. At the end of the second quarter, the fund houses covered in the survey reported aggregated FUM of US$3.1 trillion (Bt106 trillion), representฌing about 15.2 per cent of the estiฌmated total global FUM.
       The survey shows that at the end of the second quarter, FUM increased by $315 billion, up 11.4 per cent from the first quarter. Equity funds, which decreased by $85 bilฌlion in the previous quarter, posted an increase of $206 billion in the secฌond quarter, contributing the most to the overall FUM growth in the quarter. All other funds, except for money market funds, saw an increase in the quarter.
       Emerging market equities, Asia-Pacific ex-Japan equities and Greater China equities posted inflows last quarter, showing renewed confiฌdence in the region's recovery and growth prospects. Investors' risk appetite for developed markets declined, resulting in outflows in North American and European, including UK, equities.
       "In the second quarter, investors appeared to gain more confidence as evidenced by increased inflows and a return to equity funds with a bias towards AsiaPacific exJapan, emerging markets and Greater China," Lee said.
       "However, in the context of uncerฌtain longterm growth prospects in the global economy and volatile equity markets, investors continued to preserve capital by keeping a porฌtion of their assets in bonds investฌed in a diversified portfolio."
       The HSBC Fund Flow Tracker, which represents cumulative dollar value of money flows covering the past 12 quarters, showed that withฌin the equity funds sector, net inflows were recorded from the first to the second quarter. The second quarter net inflow volume returned to the highs of the first and fourth quarters of 2007.

       "In the context of uncertain long-term growth prospects in the global economy and volatile equity markets, investors continued to preserve capital by keeping a portion of thier assets in bonds invested in adiversified portfolio."