HSBC: Investments still draw interest among SMEs

HSBC's survey revealed that almost one in three small businesses in Hong Kong have investments, and nearly 40 percent say they plan to invest in the future.

"We are glad to see that many Hong Kong businesses have a considerable amount of wealth management investment and plan to invest. This shows wealth management is not only for personal investors but also a key component of business management. The financial security provided by the investments enables SMEs to better cope with unexpected opportunities or crisis," said Albert Chan, HSBC’s Head of Commercial Banking in Hong Kong.

Over half of investing SMEs said they have moderate risk tolerance. And while property is the most popular investment with 32 percent, stocks/IPOs with 27 percent, and structured products with 19 percent are also common.

More than 600 businesses in Hong Kong representing a cross-section of industries were polled in May - June 2009 by the University of Hong Kong Public Opinion Programme for the survey.

The survey also suggests many SMEs consider investing important: when SMEs were asked what they would do with a sudden cash windfall, wealth management investment tied with equipment purchases as the most popular option.

Among those surveyed who do not have investments, the top reason is concern about market volatility and risk.

Mr Chan said: "As markets improve and customers are educated about products, we expect to see the perception of risk may change and more people will invest. Among our own SME customer base, we are seeing a pickup in investment activity since the fourth quarter of last year. In the past few months, a double-digit growth was recorded in equity trading via HSBC Business Internet Banking."