IEC promotes understanding of financial products and investment fundamentals

13 August 2013

The Investor Education Centre (IEC) today launched a mass media education campaign to promote greater understanding and awareness of the risks of certain financial products, as well as a range of financial issues and key investing concepts.

Entitled "Investment training with kung-fu master", the campaign messages are in response to, amongst other things, the findings of the research report Financial Knowledge and Capability in Hong Kong: A Foundation Study, published in June 2013.

The research, which was commissioned by the Securities and Futures Commission to inform the establishment of the IEC, found that certain investment and financial concepts are not very well understood by some Hong Kong people, especially concepts which may be considered more advanced or complex. For example, the research found that when making financial decisions, 52% of respondents would focus primarily on the rate of return, with only one-fifth considering the downside risk as the most important factor. The research also found that 32% of respondents are not aware of factors affecting the price of warrants other than underlying share price; and over half of the respondents (52%) always take up shares in a rights issue if offered at a discounted price.

Consisting of a series of eight education videos, the campaign covers a range of issues relating to investing and financial products. These include the nature and risks of warrants, high yield bond funds, renminbi products as well as the things to note about opening a discretionary account and how to choose and evaluate if a fund is suitable. The campaign messages also remind investors to be aware of macroeconomic risks and promote a responsible investing attitude, eg by exercising discipline when trading derivative products and not following the herd when investing in a stock and IPO.

Mr Miles Larbey, General Manager of the IEC said: "As a major international finance centre, a wide range of financial products and services are available in Hong Kong for local and international consumers and investors, and new financial products are regularly coming on to the market. It is important that consumers and investors take the time to learn and understand the financial products they are investing in, and consider the impact of any potential changes in market conditions on their investments and finances."

The campaign adopts a creative approach to enhance the appeal to the general public and uses the concept of learning "kung-fu" as an analogy for acquiring and mastering investment knowledge. The campaign features John Chiang, a TV and movie celebrity, acting as the kung-fu master and everyday investors such as young adults, housewives, retirees, blue collar and professional workers, who strive to learn and master investing skills and knowledge. The campaign's video series will be broadcast on TV as well as public transport networks and promoted via online and mobile platforms.

Investing concepts and financial products is one of the four overarching themes for the IEC's education work to help improve financial literacy; other education themes include financial planning, money management, consumer and investor rights and responsibilities.

Members of the public are invited to visit a dedicated sitelet on the IEC website (www.hkiec.hk) for full details of the campaign.

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