Hong Kong investment professionals bullish about local economy

However, they're increasingly anxious about political instability.

An annual global survey of CFA Institute members has found that Hong Kong investment professionals are bullish about the local economy, but more pessimistic about the global economy than members from all other regions.

According to a release from the CFA Institute and the Hong Kong Society of Financial Analysts, these professionals are more optimistic about employment opportunities in the local market, but are increasingly concerned about the city’s political instability as a significant risk factor.

Hong Kong members responding to the CFA Institute 2015 Global Market Sentiment Survey (GMSS) are among the three most optimistic markets about their respective local economies, with local GDP growth projections at 3.1%, behind only China (6.2%) and India (5.8%), followed by Singapore (2.3%).

This positive sentiment is echoed by their upbeat attitude about the local job market, with 32% of Hong Kong respondents expecting employment opportunities to increase, up from 21% last year, while those thinking employment will shrink dropped from 25% to 23%.

While hopeful about the local GDP growth and job prospects, Hong Kong investment professionals are increasingly worried about political risks. According to GMSS data from the past four years, the percentage of respondents citing “political instability” as the biggest risk to the local market has continuously climbed, from 7% in 2012 to 14% in 2013, 21% in 2014, and dramatically to 49% this year."

Here's more from the CFA Institute and the Hong Kong Society of Financial Analysts:

"The survey findings suggest that investment professionals expect the ‘China factor’ and recent new developments in the financial industry, such as the Shanghai-Hong Kong Stock Connect and the anticipated Shenzhen-Hong Kong Stock Connect, will provide more investment opportunities and also increase the demand for investment professionals," said Jimmy Jim, CFA, director and advocacy chair of The Hong Kong Society of Financial Analysts (HKSFA).

“While there may be many more opportunities, we should be aware of the potential talent mismatch challenge facing our industry, and devote greater efforts to groom and attract the right talents. To have a profession with people of high educational and ethical standards is crucial for long term sustainability,” continued Mr. Jim.

”At the same time, to maintain Hong Kong’s status as an international financial centre, we must safeguard the highest standards of corporate governance and our unswerving respect for the rule of law, both key assets that differentiate us from other markets. Only by upholding these core values can we thrive amidst increasing competition and strengthen Hong Kong’s position as an asset management hub in Asia, while continuing to bridge the international community with financial markets in mainland China.

“With the closer connections between Hong Kong and China’s financial markets, differences in opinion may lead to conflicts and political instability, and subsequently affect market activities. Local as well as international investors will understandably view this as a major risk factor. This is a key issue for Hong Kong – local regulators and industry practitioners alike – in order to maintain the city’s long-term competitiveness and continue to enhance our financial infrastructure.” said Mr. Jim.