Hong Kong losing out to Singapore in terms of public financial knowledge

Hong Kong is losing out to Singapore again in terms of the public’s financial knowledge, leading to calls from regulators and others to improve the quality of market and investor education.

The financial literacy rate in Hong Kong stood at 43 per cent, lagging behind Singapore at 59 per cent but higher than Taiwan at 37 per cent, South Korea at 33 per cent and mainland China at 28 per cent, according to a report by Standard & Poor’s.

Last week Singapore displaced Hong Kong as the No 3 financial centre among 86 global markets in the latest survey by research institute Z/Yen Group. London remained on top and New York ranked second.

“These are signals that Hong Kong needs to seek ways to improve ourselves,” said Carlson Tong Ka-shing, chairman of Securities and Futures Commission.

“We need to improve the quality of our new listing regime and market quality. We also need to educate the public to know more about investment and financial management,” he said.

Veteran banker Chan Tze-ching, a director of Hong Kong Exchanges and Clearing, said Singapore is keen on developing its financial services industry.

Bruno Lee, senior managing director of Manulife Asset Management, agrees Singapore has been active in promoting investor literacy in financial planning, investment and retirement.

“In comparison, Hong Kong investors tend to focus on stock investments but they are not keen on learning retirement or other financial planning. These could be improved by the investor education programme,” Lee said.

“When I studied in Britain in 1971, my family only gave me about HK$500 per month while HK$300 was used to pay rent. I could not even afford to buy a mango. This however forced me to learn the lesson of never spending more than my income,” Tong said. “I did not give credit cards to my children when they were young. Good retirement planning allowed me to retire fiver years early.”

David Kneebone, general manager of the Investor Education Centre, said Hong Kong people have unrealistic expectations when its comes to market returns.

“Our survey showed 33 per cent of respondents expect their investment would have a 20 per cent return. This is not realistic,” he said, pointed out the Hang Seng Index lost 7.2 per cent last year while the US S&P 500 Index was down 0.7 per cent. Bank saving rates are close to zero.

The survey showed only 14 per cent of investors have set financial goals for retirement while half of investors surveyed have not prepared any emergency funds.

(SCMP)