survey highlightshighlights 2016 singapore trading …...^new options added q69 which of the...

Survey Highlights 2016 Singapore Trading

Behaviour Survey

© 2016 Investment Trends 1

1Copyright 2016 Investment Trends. Confidential. 2016 Singapore Trading Behaviour survey highlights. Reproduction prohibited.

2016 Singapore Trading Behaviour Survey

Deep Insights Research Confidential. Reproduction Prohibited

Highlights


Behaviour Survey


Thank you

Thank you again for taking part in our 2016 Singapore Trading Behaviour Survey. Your responses, together with those of other investors, provide a valuable insight into the current state of the Singaporean investment landscape. The resulting research will help stockbrokers and other providers create products and services better suited to your needs. The 2016 Singapore Trading Behaviour Reports provides a detailed portrait of Singapore’s sophisticated population of active share investors and CFD/FX traders. Many of its key findings are highlighted in this extract, including some fascinating insights into the behaviour of your fellow investors. I hope you find it interesting. Yours sincerely, Mark Johnston Executive Chairman and Founder

Investment Trends Suite 2102, Goldfields House 1 Alfred Street SYDNEY NSW 2000 Australia


Behaviour Survey


Table of contents

About Investment Trends ..................................................................................... 4

Concern levels ........................................................................................................ 5

Capital gains expectations ................................................................................... 6

Trading Representatives ...................................................................................... 7

Investment products ............................................................................................. 8

Decision support .................................................................................................... 9 Social trading ....................................................................................................... 10

Robo-advice ..........................................................................................................11

Familiarity with investment instruments ........................................................12

Trading support ....................................................................................................13

Trading platforms ................................................................................................14

Education needs ...................................................................................................15


Behaviour Survey


About Investment Trends Investment Trends is a specialist research organisation that provides new business insights and decision support information to many leading financial services organisations. We combine analytical rigour and strategic thinking with the most advanced market research and statistical techniques to help our clients gain competitive advantage.

Investment Trends is headed by Mark Johnston. Mark has been a leading industry analyst in the brokerage, CFD, FX and wealth management industry since 1999.

Investment Trends is an Australian company that has grown into a global research organisation servicing clients in Australia, Asia, Europe and the US.

Our work is focused on helping clients answer three fundamental questions:

1. How does the market currently work?

2. How is the market evolving?

3. How do I improve customer outcomes:

o Increase customer satisfaction

o Develop the products investors want

o Introduce tools and services necessary to enhance the customer experience

o Use technology to engage and support investors

Investment Trends’ clients include many of the leading banks, insurance providers, investment platform providers, online brokers, FX and CFD providers, fund managers, as well as major industry regulators.


Behaviour Survey


Concern levels Investor concern levels rise to the highest

since September 2012

On a scale of 0 to 10, Singaporean share investors' concern about the world’s financial markets currently measure at 7.1 out of 10, up from 6.9 in September 2015. These elevated concern levels follow from a dive in the STI over the past 12 months. Among the key economies surveyed, Singapore and Hong Kong investors are more concerned than their peers in Australia, the US and the UK.


Average concern level vs Straits Times Index (STI)

Among current investors in each country

7.4

7.0

6.8 6.76.9

7.1

2,500

2,600

2,700

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

3,600

Apr

11

Jun

11

Aug

11

Oct 1

1

Dec

11

Feb 1

2

Apr

12

Jun

12

Aug

12

Oct 1

2

Dec

12

Feb 1

3

Apr

13

Jun

13

Aug

13

Oct 1

3

Dec

13

Feb 1

4

Apr

14

Jun

14

Aug

14

Oct 1

4

Dec

14

Feb 1

5

Apr

15

Jun

15

Aug

15

Oct 1

5

Dec

15

Feb 1

6

Apr

16

Jun

16

Aug

16

Str

ait

s T

ime

s I

nd

ex

(S

TI)

4

5

6

7

8

Co

nc

ern

le

ve

l o

ut

of

ma

x.

10

STI Index Australia UK US Singapore Hong Kong

Singaporean investors’ concern levels remain elevated and are rising

Question wording:

How concerned are you with the current state of the world’s financial markets? (Please rate how concerned you are, where 0 is not at all concerned and 10 is extremely concerned)


Behaviour Survey


Capital gains expectations Average return expectations collapse

Singaporean investors expect a flat performance from the Straits Times Index (STI) in the coming 12 months. This is the lowest level recorded since September 2012, when return expectations were flat in the aftermath of the European debt crisis. This drop in return expectations is in line with falling return expectations among investors surveyed in the UK, the US and Hong Kong.


Average return expectation (excluding dividends) vs Straits Times Index (STI)

Among current investors in each country

0%

2% 2%

1%

0%

6%

2,500

2,600

2,700

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

3,600

Apr

11

Jun

11

Aug

11

Oct 1

1

Dec

11

Feb 1

2

Apr

12

Jun

12

Aug

12

Oct 1

2

Dec

12

Feb 1

3

Apr

13

Jun

13

Aug

13

Oct 1

3

Dec

13

Feb 1

4

Apr

14

Jun

14

Aug

14

Oct 1

4

Dec

14

Feb 1

5

Apr

15

Jun

15

Aug

15

Oct 1

5

Dec

15

Feb 1

6

Apr

16

Jun

16

Aug

16

Str

ait

s T

ime

s I

nd

ex

(S

TI)

-2%

0%

2%

4%

6%

8%

10%

12%

14%

Av

era

ge r

etu

rn e

xp

ecta

tio

n (

exc

lud

ing

div

ide

nd

s)

STI Index Australia UK US Singapore Hong Kong

Question wording:

What is your expectation for the [local stock market] over the next 12 months

(excluding dividends)?

Investor outlook on equities continued to deteriorate. Similar to their US and UK

peers, Singaporean investors expect the STI to be flat over next year


Behaviour Survey


Trading Representatives Many online investors use trading representatives

The remisier model is well understood with the majority (73%) of current online investors having used one at some point, and more than one in five (21%) online investors saying they used a Trading Rep/Remisier in the last six months. Only two in five current online investors say they have never used a remisier.


Never used

one before, 37%

Within last

6 months, 21%

6-12 months

ago, 9%

1-2 years

ago, 8%

3-5 years

ago, 8%

5-10 years

ago, 8%

More than 10

years ago, 9%

Q93 When did you last trade through a remisier/adviser?

Among current online investors [n=6113]

Online investors also use their Trading Representatives. Less than two in five of them

say they have never used a Trading Representative or Remisier


Behaviour Survey


Investment products Use of ETFs has increased over the past five years

Local shares remain the most used investment product, though the percentage of current online investors trading in local shares has fallen over the past year. In contrast, the popularity of ETFs has been growing in recent years and accelerated in the past 12 months.


Use of ETFs had been increasing, and accelerated in the past 12 months

^New options added

Q69 Which of the following do you currently use for investment or trading purposes?

(Multiple responses permitted) Among current investors

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Local shares

Savings accounts

Term deposits

International shares

Managed funds/unit trusts

ETFs

Real estate (property)

Fixed income/Bonds

Options

Spot gold^

Warrants

Futures

Crowdfunding/Peer to Peer lending^

Other

Sep 2012 [n=5287]

Sep 2013 [n=3522]

Sep 2014 [n=6676]

Aug 2015 [n=5492]

Aug 2016 [n=8391]


Behaviour Survey


Decision support Most online investors use fundamental analysis or

business news

More than half (53%) of current online investors use fundamental analysis to make their investment decisions. A similar sized group (52%) relies on business/economic news for decision support. Reliance on technical analysis, tips from newsletters and third-party recommendations has trended downwards over the past three years.


^New option added

0% 10% 20% 30% 40% 50% 60% 70%

Fundamental analysis

Business/economic news

Technical analysis

Use my instinct/gut feeling

Tips from investment newsletters

Alert services^

Recommendations from friends/colleagues

Recommendations from an independent source

Follow other investors on social trading sites

Recommendations from remisier

Recommendations from broker

Automated trading signals

Signal websites

Other

Sep 2014 [n=4672]

Aug 2015 [n=5064]

Aug 2016 [n=5047]

Q147 How do you decide on what investments to make?

(Multiple responses permitted) Among current online investors

The majority of online investors use fundamental analysis or business news to make

their investment decisions. Only 10% follow others on social trading sites


Behaviour Survey


Social trading TradeHero leads among social trading websites

Social trading is an increasingly popular channel to access the financial markets. Use of social trading as a trading strategy is still small in the Singaporean market, with only 10% of current online investors deciding on their trades by following other traders. Among those who do, about one in six (17%) use TradeHero, followed by eToro (15%), FX Junction (14%) and ayondo (12%). TradeHero’s acquisition by Germany-headquartered firm ayondo is therefore going to lift ayondo to the position of market leader in social trading in Singapore.


^New option added

17%

15%

14%

12%

9%

6%

6%

6%

5%

4%

14%

12%

0% 10% 20% 30%

TradeHero

eToro

FX Junction

ayondo

Tradency

TradingFloor

Currensee

Myfxbook

Sirix Trader

ZuluTrade

Tradeo

Other

Q138 Which of the following social trading companies, if any, do you have an account with?

(Multiple responses permitted) Among current online investors

who follow social trading companies [n=141]

As at August 2016, TradeHero is the most used social trading website


Behaviour Survey


Robo-advice Very few Singaporeans use Robo-advice, but they are

interested

Robo-advice is an automated online investment service that is now being offered in many countries. Investors begin by answering a series of questions about themselves and their investment goals and risk profile. A computer program takes this information and produces a recommended investment portfolio they can choose to invest in, with little or no human contact. Less than a third (30%) of current online investors have heard of Robo-advisors, and only 0.5% say they have used one such product. However, another 37% say that even though they are not familiar with the concept, they would like to learn more about it.


Robo-advice remains a fringe investment product in Singapore,

but there is healthy interest

30%

Q183 Before completing this survey, had you heard of automated investment services

(robo-advice)? Among current online investors [n=5,271]

Yes, have invested

using one, but

stopped, 0.3%

Yes, have

invested

using one, 0.2%

Yes, but not

interested,

10%

Yes, and interested

in learning more,

18%

Yes, but not

interested, 10%

No, but interested

in learning more,

37%

No, and not

interested, 33%


Behaviour Survey


Familiarity with investment instruments Most online investors are familiar with ETFs

More than seven out of ten (71%) current online investors say they are familiar with ETFs. Awareness of leveraged instruments is much lower. Just over half (53%) of online investors are familiar with FX, while 32% are familiar with CFDs, and only 12% familiar with binary options.


4%9%

20%10%

28%

44%

51%59%

59%

45%

28%29%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Binary options CFDs FX ETFs

Never heard ofthis instrument

Not familiar

Somewhatfamiliar

Very familiar

Q5 How familiar would you say you are with the following instruments?

Among current online investors [n=6128]

32%

53%

Online investors are a lot more familiar with ETFs than OTC derivatives.

Less than one in twenty say they are very familiar with CFDs


Behaviour Survey


Trading support Technical analysis is a key decision support tool for CFD

and FX traders

The majority of current CFD and FX traders use technical analysis to decide which trades to make. Business/economic news and fundamental analysis come next, but still nearly one in five traders rely on their instinct to make their trading decisions.


0% 10% 20% 30% 40% 50% 60% 70%

Technical analysis (charts)

Business/economic news


Use my instinct/gut feeling

Alert services

Independent analyst recommendations

Automated trading signals

Tips from friends

Follow other traders on social trading sites

Recommendations from my main broker

Research offered by my main broker

Signal websites

OtherAll current CFD traders [n=1472]

All current FX traders [n=1062]

Q52 How do you decide on what your current product trades to make? (Multiple responses permitted)

Current CFD traders versus current FX traders

Both CFD and FX traders most often use technical analysis on their trades


Behaviour Survey


Trading platforms MetaTrader4 is the most used FX trading platform

More than two in five (41%) current FX traders use MetaTrader4, making it the most used FX trading platform. In contrast, CFD traders most often use their provider’s proprietary platform (browser). Use of MetaTrader5 is still small, with only 3% of current CFD traders and 4% of current FX traders using it.


Q45 Which platform(s) do you use for your CFD/FX trading?

(Multiple responses permitted) Current CFD traders versus current FX traders

0% 10% 20% 30% 40% 50% 60% 70%

My provider's proprietary

platform (browser)

My provider's proprietary mobile

app

My provider's proprietary

platform (download)

MetaTrader 4

ProRealTime

MetaTrader 5

Another platform All current CFD traders [n=1216]

All current FX traders [n=927]

FX traders prefer MetaTrader4 while CFD traders prefer their provider’s proprietary

platform (browser)


Behaviour Survey


Education needs Traders want education focused on trading strategies

Singaporean CFD/FX traders most often point to trading strategies (47%), technical analysis (38%) and fundamental analysis (30%) as their largest educational needs. Only 13% of current CFD/FX traders say that they don’t need any education/ information regarding leverage trading.


CFD/FX traders most often would like education on trading strategies, technical

analysis and common fundamental analysis

13%

6%

7%

9%

10%

11%

12%

14%

15%

17%

21%

21%

23%

23%

26%

30%

38%

47%

0% 10% 20% 30% 40% 50% 60% 70%

Trading strategies

Technical analysis/charting


Market reports

Advisory services

Common trading mistakes

Risk management

Latest market updates via emails

Automated trading

How fees and charges work

Networking with other traders

Placing conditional orders

How leverage works

Basic introductory information

Understanding terminology

Trading platform user guide

Changes in regulation

Other

Nothing

Q67 What types of education/information would be very useful to you regarding your CFD/FX trading?

(Multiple responses permitted) Among current CFD/FX traders [n=2390]


Behaviour Survey


[email protected] www.investmenttrends.com

© Copyright 2016 Investment Trends Pty Limited. All rights reserved.

The material in this study (“Highlights from the Investment Trends 2016 Singapore Trading Behaviour Survey”) contains proprietary information including copyright material and trademarks, the rights to which must be respected. Investment Trends owns the copyright in the design, selection, arrangement, production, as well as in the material originally developed by or for Investment Trends. The copyright material is provided for your personal only. Otherwise, and except as permitted by law, no copying, publication, modification or commercial exploitation of the Report is permitted without the prior written permission of the owner.

Except for any rights under any legislation in Singapore or any other relevant jurisdiction which cannot be excluded or limited, Investment Trends does not provide a warranty with this Highlights Pack or give an assurance as to its accuracy or reliability. Investment Trends shall not be liable for any damages you suffer, or which are claimed against you by a third party, arising out of use of the Highlights Pack.

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