Investor sentiment negative

From

The latest Financial Services Council/CoreData Investor Sentiment Index shows investor confidence remains negative for the second quarter in a row.

The Index, prepared by CoreData for the Financial Services Council, shows investor sentiment fell a further 0.5 points to -9.0 in quarter three 2010.

Sentiment is now more than 16 points lower than at the end of 2009 when investors were cautiously optimistic about the strength of the Australian economy and their own financial security.

John Brogden, CEO of the Financial Services Council, said: “While sentiment did not deteriorate significantly, it is clear investors remain uncertain about the future.

“Investor uncertainty is not surprising given the concerns about the European and US economies and the recent period of political upheaval resulting in Australia’s first minority Government in 70 years.

“The number of investors expecting economic growth to accelerate in Australia has declined over the last four quarters and now stands at 26.8 per cent, with half of the respondents expecting growth to slow next quarter.

“While the data suggests investors are reluctant to invest new money, their satisfaction with existing investments remains consistent with the last quarter at 37.7 per cent, with a further 37.6 per cent neutral.  Of those that make additional contributions to superannuation, 76.7 per cent expect to keep the level of their contributions the same over the next year while 16.9 per cent expect to increase their super contributions.”

Tracking investor sentiment Q4 2004 – Q3 2010

Kristen Paech, head of advice, wealth and superannuation at CoreData, said:  “The RBA’s decision to abstain from rate rises over the past three months has clearly provided a reprieve for mortgage owners, with the average household slightly better off this quarter.

“However, the expectations around future economic growth suggest Australians remain unconvinced that the future is bright, despite the market recovery.”

INVESTOR SENTIMENT NEGATIVE
The latest Financial Services Council/CoreData Investor Sentiment Index shows investor confidence remains negative for the second quarter in a row.

The Index, prepared by CoreData for the Financial Services Council, shows investor sentiment fell a further 0.5 points to -9.0 in quarter three 2010.

Sentiment is now more than 16 points lower than at the end of 2009 when investors were cautiously optimistic about the strength of the Australian economy and their own financial security.

John Brogden, CEO of the Financial Services Council, said: “While sentiment did not deteriorate significantly, it is clear investors remain uncertain about the future.

“Investor uncertainty is not surprising given the concerns about the European and US economies and the recent period of political upheaval resulting in Australia’s first minority Government in 70 years.

“The number of investors expecting economic growth to accelerate in Australia has declined over the last four quarters and now stands at 26.8 per cent, with half of the respondents expecting growth to slow next quarter.

“While the data suggests investors are reluctant to invest new money, their satisfaction with existing investments remains consistent with the last quarter at 37.7 per cent, with a further 37.6 per cent neutral.  Of those that make additional contributions to superannuation, 76.7 per cent expect to keep the level of their contributions the same over the next year while 16.9 per cent expect to increase their super contributions.”

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