Local residents investing more in long-term debt securities

Macau residents are investing more in long-term debt securities at the expense of equity securities, according to the Co-ordinated Portfolio Investment Survey 2014 published yesterday by the Monetary Authority of Macau (AMCM).
At the end of last year, investment by Macau residents in securities issued by non-residents – excluding MSAR’s foreign exchange reserves – amounted to MOP399.1 billion, an increase of 2.3 per cent year-on-year.
Long-term debt securities represented 57.4 per cent of the total investment of residents, while in 2013 they represented 52.3 per cent.
In one year equity securities dropped to 38.8 per cent in 2014 (MOP155 billion) from 43.9 per cent. Meanwhile, in terms of percentage short-term debts securities remains unchanged and account for 3.8 per cent of Macau residents’ portfolio investment.
Geographical Mainland China is the most popular market to invest in securities issued by external entities. With a market value of MOP192.9 billion, investments by the motherland amounted to 48.3 per cent. Hong Kong (18.3 per cent), Cayman Islands (6.3 per cent), the United States (5.7 per cent) and Luxembourg (3.6 per cent) are the other preferred places.
Mainland China is able to attract more of the investment in terms of long-term debt securities (66.3 per cent), ahead of Hong Kong (6 per cent), and short-term debt securities (85.5 per cent), followed by the neighbouring SAR (7.9 per cent).
However, when it comes to equity securities, Hong Kong is the favourite market, taking 37.6 per cent of the share. Mainland China is the second-preferred place to invest in equities with a slice of 18.2 per cent.
From the portfolio investment, the banking sector accounted for 13.1 per cent (MOP52.5 billion), while individuals, government and non-bank enterprises generated 86.9 per cent (MOP346.7 billion) of the investment.
Banking institutions are responsible for 93.8 per cent of the investments in short-term debt securities, which the survey explains by the ‘abundant liquidity’ of the sector. On the other side, banks are only responsible for 0.3 per cent of the equity securities investment, which is explained by the ‘stringent banking regulations’.
Regarding non-bank entities’ investments, the majority of Macau residents chose to manage their investment portfolios through banking institutions, despite the fact that in 2014 two licensed securities firms were operating in the region.
J.S.F.