29 JANUARY 2002
Investor Confidence Remains Low But Not For Long Says ASB Bank
Investor confidence remained weak over the last quarter of 2001 with a net 4% of respondents expecting worse returns from investments over the next year, in ASB BANK’s latest Quarterly Investor Confidence Survey.
The survey shows 26% of investors expect their returns to be worse than last year, an increase of 8% from the previous quarter, while just 22% expect their returns to be better, down from 27%.
Roger Perry, ASB BANK’s Chief Manager, Investments, believes that the low level of investor confidence is not likely to last long.
“In the months since the September 11 terrorist attack all major investment markets have shown positive returns. Also, the war in Afghanistan is being resolved quickly, and there are favourable prospects for a synchronised economic recovery in Europe and the United States. Consequently we believe investor’s confidence will improve over the coming year.
“The survey shows that those who have their investments mainly in term deposits, where interest rates fell steadily through 2001, are the most pessimistic about prospects. Investors in shares and managed funds are moderately pessimistic, reflecting the volatile share market conditions they have experienced over the last year. In contrast, investors in small business and commercial property are quite optimistic about the future, perhaps indicating the robustness of the domestic economy,” he says.
Older investors are significantly more pessimistic than younger investors. A net 19% of those aged over 60 expect worse returns, whereas a net 7% of those aged under 30 expect better returns. Women are more pessimistic than men: a net 10% negative to a net 2% positive. South Islanders were considerably more pessimistic; a net 12% negative compared to North Islanders at a net 2% negative for the Lower North Island and a net 1% negative for the Upper North Island.
When respondents were asked which investment they thought would give the best return in the year ahead, direct share investments experienced a fall in support. They were favoured by just 8% of respondents, down from 10% in the September quarter, and 13% in the June quarter. Term Deposits and Residential Rental Property remained steady, favoured by 13% of respondents. Investors still prefer Managed Investments as the investment type that they expect to give the best return. They are favoured by 21% of respondents, and this has remained steady for 12 months.
- The ASB BANK Quarterly Investor Confidence Survey is a nationwide survey, which has been undertaken every quarter since May 1998 interviewing a sample of up to 1000 respondents.