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ING Investor Sentiment Index


Auckland, 23 January 2008

Despite possible subprime woes, investor confidence stable in New Zealand and remains cautiously optimistic overall, reveals ING investor sentiment index

ING Investor Sentiment Index shows that the confidence level among New Zealand investors remained stable midway through the fourth quarter of 2007 despite fears about the ripple effect of the US subprime mortgage crisis, and the failure of several more local finance companies.

New Zealand and Australian investors bucked the regional trend in the Asia-Pacific survey, which shows investor sentiments had moderated somewhat in most of the 13 countries surveyed.

Across the Asia-Pacific region, the overall sentiment going into 2008 remained robust with investors in India, Hong Kong, and Philippines among the most optimistic, while those in Japan, Australia, New Zealand and Taiwan the least optimistic. Australian and New Zealand investors were slightly more optimistic than in the past survey, while the previous quarter's enthusiasm by Chinese investors has dampened.

The survey, conducted in late November 2007, found investors in New Zealand and Australia feel more immune to the credit crunch than the rest of Asia Pacific, with few indicating it will affect their investment decisions. The survey does not capture more recent events that have seen some markets drop on growing concern about the global economy.

Overall, Australians and New Zealanders were fairly stable in their views about the market and remained positive about the investment environment in the near future. In this climate, New Zealand investors continued to favour low-risk investments, such as fixed interest products, and were shying away from the high-risk sector, such as equities. They tended towards a more conservative or balanced investment strategy with very few opting for an aggressive approach.

In terms of the short-term economic outlook, New Zealanders were more cautious than their regional counterparts, with only 30% believing the economic situation here will improve in the next three months, while 39% feel it will deteriorate. This was, however, lower than the 49% who felt the economy deteriorated in the past three months.

Sentiment about the stock market in the next three months was more positive, with only 38% thinking it will decline (compared to 51% last survey) while 27% expect it will rise, up from 23%, and 36% picking it will remain stable (up from 26%).

Among the 13 surveyed markets, investors in India, the Philippines and Hong Kong are the most bullish. Japanese respondents remain the least optimistic, with only 17% believing investor sentiment will improve in 2008, possibly a reflection of the country's ongoing economic and political instability.

ING New Zealand CEO Marc Lieberman said that until recently, New Zealanders appeared relatively unconcerned by the impact of the subprime mortgage crisis, but had already started showing a greater preference for low and medium-risk investments and feeling less confident about the local stock market compared to the other countries surveyed.

"New Zealand, of course, had its own issues with a widening of the cracks that had been appearing in the finance company sector. This has definitely impacted on investor sentiment, not to mention the economy," he said.

Against a general backdrop of economic uncertainty, an increasing number of investors shifted away from riskier investments. Managed fund investments rose in eight out of 13 markets, including Australia and New Zealand where the percentages jumped to 42% (wave one: 26%) and 28% (wave one: 19%) respectively.

"With an extremely risk-averse psyche developing now among investors, we see reliable and stable returns continuing to remain at the top of most people's wish list," added Mr. Lieberman.


Notes to Editors

About ING Investor Sentiment Index

ING Investor Sentiment Index is based on the analysis of the ING Investor Sentiment Tracking Study, a quarterly survey commissioned by ING and carried out by international and independent research firm TNS with the aim to understand and track over a period of time the changes in market sentiments, investment attitudes and behaviours. The research surveyed 13 markets across Asia, including Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand and conducted online or face-to-face interviews with a total of 1,311 mass affluent respondents across all markets.

In Australia, New Zealand, Japan, Hong Kong, Singapore, Korea, China, Taiwan, Malaysia, India and Thailand (n=1,111), mass affluent is defined as person aged 30 or above and with disposable asset of USD 100,000 or above; in the Philippines (n=100), it is defined as a person aged 30 or above and either with disposable asset of USD 100,000 or above OR monthly personal income of Php. 200,000; and in Indonesia (n=100), a person aged 30 or above with disposable asset of USD 56,000 or above.

About ING

ING is a global financial institution of Dutch origin offering banking, insurance and asset management to over 75 million private, corporate and institutional clients in more than 50 countries. With a diverse workforce of about 120,000 people, ING comprises a broad spectrum of prominent companies that increasingly serve their clients under the ING brand.

About TNS

TNS is the world's foremost provider of custom research and analysis, combining in-depth industry sector understanding with world-class expertise in the areas of Retail and Shopper Insights, Stakeholder Management, New Product Development and Brand and Communications. We work in partnership with our clients, meeting their needs for high-quality information, analysis and foresight across our network of over 70 countries.

[1] To illustrate the ING Investor Sentiment Tracking Survey, ING developed the 'dashboard' above to present key findings. Modelled on a car dashboard to underscore the increasing affluence of Asians, the dashboard presents the economic outlook, the investor score for each country and the percentage expecting overall sentiment to improve in 2008 compared to 2007.

ING Investor Sentiment Index

Key Findings

Investor Sentiment in Asia

Ø Investor confidence across Asia has dropped amid subprime woes and political uncertainties in some markets, but overall sentiment for 2008 remains positive.

- India remains the most optimistic, while other less developed markets including the Philippines, Indonesia and Thailand are also seeing a slight improvement in sentiment this wave.

- Hong Kong sees a slight boost in sentiment, overtaking China, whose previous quarter's enthusiasm has been dampened.

- Confidence plummets in Taiwan due to political uncertainty and Japan remains the least optimistic.

Investment Tools Used

Ø As with wave one's findings, cash, local stocks and funds, as well as local properties are the most popular investment tools across countries.

Ø An increasing number of investors have shifted away from riskier investments such as stocks for the historic safe haven options of gold, REITs and mutual funds in the past three months.

Ø Two more countries in this wave - India and Thailand - have treated gold as a more popular tool.

Ø Investments in gold and REITs doubled in Hong Kong while mutual fund investments also rose in 8 out of 13 markets, particularly in Australia and Korea.

Investment Strategy in 2008

Ø In general, investors' strategy for 2008 remained rather similar to last quarter except for Malaysia, Indonesia and India where more investors claimed they will be conservative.

Ø Slightly more investors in Australia and Thailand claimed that they will be taking a more aggressive investment approach in 2008.

About the Survey

Ø ING Investor Sentiment Tracking Study aims to:

- gauge changes in market sentiments

- understand current and future intentions in investment behaviours

- assess trends in risk absorbance

Ø The survey is conducted by global research firm TNS on a quarterly basis:

- Wave one: August 2007

- Wave two: November 2007

Ø For wave two, a total of 1,311 mass affluent investors across 13 Asia-Pacific markets were interviewed through either face-to-face or online interviews

Ø Mass affluent investors are defined as those individuals aged 30 years or above who have disposable assets or investments of US$100K or above with the exception of Indonesia (disposable assets or investments of US$56,000 or above) and the Philippines (disposable assets or investments of US$100K OR monthly personal income of Php200,000 or above)

Ø The 13 Asia-Pacific countries included:

- Australia - Nationwide

- China - Beijing, Shanghai and Guangzhou

- Hong Kong

- India - Mumbai and Delhi

- Indonesia - Greater Jakarta

- Japan - Nationwide

- Korea - Nationwide

- Malaysia - Kuala Lumpur / Petaling Jaya

- New Zealand - Nationwide

- Philippines - Metro Manila

- Singapore

- Taiwan - Greater Taipei

- Thailand - Greater Bangkok

© Scoop Media

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