Investor Confidence 15 month high

NZ Investor Confidence Perks Up – Survey
09/10/2006 07:33 AM
Reuters
New Zealand investor confidence picked up in the third quarter to its highest level in 15 months as people put concerns of a slowing economy and volatile markets behind them, according to a survey released on Monday.

A net 19 percent of respondents to the ASB Bank investor confidence survey believed their investment returns would improve this year, up 3 percentage points from the previous quarter, and double the level of the first quarter.

“While we continue to get mixed messages about the performance of asset classes in New Zealand and overseas there is enough good news in key indicators such as equities, employment, and housing to drive confidence,” said ASB’s head of investments services, Jonathan Beale.

Residential property remained the most favoured asset, with 19 percent expecting it to provide the best return over an indeterminate timeframe, unchanged from the previous survey.

However, there were declines in those favouring term deposits, bank savings and managed investments.

“It is a real surprise to see drops in confidence with savings and term deposits, given the rates currently available in the market and the continued success of high interest call accounts,” said Beale.

Retail interest rates – borrowing and lending – have been underpinned this year by the central bank’s world leading cash rate of 7.25 percent and the prospect it will stay at that level well into next year to cope with stubborn inflation pressures, in part fuelled by high house prices.

Data released earlier on Monday showed the annual rate of growth for New Zealand houses was steady at 10.4 percent in September.

Bank savings were the second most popular asset with 12 percent, down 1 percentage point, followed by managed investments with 10 percent, and term deposits.

Shares slipped to fifth spot with 8 percent, down two percentage points.

The NZ stock exchange’s benchmark top-50 index so far this year has gained 6.6 percent.

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