Manulife Report Suggests High Yield Stock for Education-Minded Indonesian Investors
Jakarta. Indonesia’s education-minded parents must start investing in the high-yielded stock market, rather than in savings or time deposits to avoid losses from a higher cost of financial goals, a report published by Manulife Asset Management on Thursday said.
The report, titled “One Step Forward, Half a Step Back: Meeting Financial Goals in Asia,” tracks Manulife’s Investor Sentiment Index, summarizing 4,000 investor views across Hong Kong, China, Taiwan, Japan, Singapore, Malaysia, Indonesia and the Philippines between May 30 and June 27, 2014.
The report found that Indonesian respondents remain adamant in placing their money in low-yielding saving deposit for their retirement, emergency funds, maintaining their lifestyle, purchasing a home and their children’s higher education.
“We often worry about the 7.15 percent [annual headline] inflation when, actually, the cost for education is rising faster than inflation,” said Legowo Kusumonegoro, Manulife Asset Management president director.
The cost for education on average rises 15.1 percent per year, retirement increases 6.3 percent, emergency costs rise 13.3 percent, lifestyle costs by 6.3 percent, while home prices increase 6.0 percent per year, Legowo said.
Meanwhile, Indonesians’ investment portfolios — 47.5 percent of which are time deposits, followed by savings and property — only offer total returns of 4.5 percent per year.
“Many investors’ savings are inappropriately positioned to meet their financial goals,” added Legowo. “Many investors lack the skill to mix and rebalance across asset classes. We are too lazy to learn and to look for more optimized investment. We need to further educate people on this.”
“The Indonesian stock market could provide an average yield of over 14 percent per year,” Michael Dommermuth, Manulife Asset Management Hong Kong chief executive officer and head of wealth and asset management Asia, said in a press release.
Dommermuth said Indonesia showed a distinctive pattern in the report, as it was “the only market that pointed education for children as one of the main goals, while retirement was the number one objective across pan-Asia.”
Even with a little difference in priority, Indonesia and most countries in Asia have the same problem, he added.
“In every single market across Asia, there’s a big gap between investment returns and cost growth in top five financial goals,” he said.
“More developed economies have more choices in investment, including offshore equity and fixed income to complement existing local market exposure. While in less-developed countries, there’s a need to encouraging capital market participation.”
GlobeAsia
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Source: The Jakarta Globe
