Bullish outlooks: A deep dive into the hot investment trends for the year ahead
Despite Hong Kong’s IPO markets possibly seeing a record year, there remains an uncertainty around inflation, the effect of rising numbers of retail investors, and changing trends for institutional investors.
Despite Hong Kong’s IPO markets possibly seeing a record year, there remains an uncertainty around inflation, the effect of rising numbers of retail investors, and changing trends for institutional investors.
Moderated by Georgina Lee, Specialist Reporter in Business at SCMP, giving their time to share their opinions and expertise are: Paul Colwell, Head of Advisory Portfolio Group & Senior Director for Investments Asia at Willis Towers Watson, Eva Lee, Head Hong Kong Equities at UBS Global Wealth Management Chief Investment Office, James Quinn, Managing Partner of Q9 Capital, and Julia Wang, Executive Director & Global Market Strategist at J.P. Morgan Private Bank.
Regarding whether or not the current economic growth is sustainable, Paul Colwell, Head of Advisory Portfolio Group & Senior Director for Investments Asia at Willis Towers Watson, notes that post-pandemic, “what we are really starting to grapple with is moving from the recovery period to the later stages of the cycle.” Inflation is one of the key risks that may prove to be very disruptive in the next several years, and Colwell speculates how much volatility this inflation uncertainty will cause.
In terms of current investment opportunities, Julia Wang, Executive Director & Global Market Strategist at J.P. Morgan Private Bank, notes the two ways of looking at investments: through the lens of megatrends, and through the lens of tactical layers. The biggest megatrends today are sustainability, healthcare, automation, and digitalisation. This means investing in these sectors will likely provide long-term gains as they continue to rise in popularity and global relevance. The tactical layer may include business cycle issues such as inflation. When advising investors, Wang also notes how both megatrends and tactical factors must be considered.
These megatrends are a powerful driver of investment, and a greater number of investors are embracing “alternative” assets such as cryptocurrencies. According to Eva Lee, Head Hong Kong Equities at UBS Global Wealth Management Chief Investment Office, many investors also “have their eye on who will be the ESG (Environmental, Social, and Governance) leaders” that do the most to protect the environment. This is not only because of the pressing need to manage climate change but also because sustainable investments actually generate better returns.
Perhaps due to the increased amount of time that people have at home, retail investors, and even “meme investors," have become more prevalent in the market. A larger number of retail investors isn’t necessarily a bad thing for institutional investors, as they produce a lot of momentum trading, short-term behavior, and significant stock swings which institutional investors can take advantage of.
There are still a lot of uncertainties about the future of both institutional and retail investing, but the megatrends are clear and the market levels seem to be relatively sustainable, at least for the present moment.
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