Investors positive but confidence still low

IRISH INVESTORS are more positive about the economy than in the more global economic picture, but confidence is still low and falling, a new survey shows.

According to the RaboDirect Investor Barometer, only 9 per cent of investors are upbeat about the development of the global economy in the next three months, while 20.9 per cent are optimistic about Ireland’s chances.

That compares with 20 per cent who were confident about the world economy in September, while 27 per cent had a positive outlook on the Irish economy then.

Over the past three months, investors remained relatively steady in their opinion of the development of the economy, with optimism at 26.8 per cent (last year optimism levels were about 7 per cent). Morale has been battered recently by the euro zone crisis and talk of a global slowdown.

The survey indicates that some investors believe Ireland is moving in the right direction, despite gloomy predictions for growth and the warning that the export-led recovery may slow along with the global economy.

“On a personal level,” Killian Nolan, investment manager at RaboDirect said, “investors are a little less confident about their own financial situations over the next three months (57.6 per cent against 65.4 per cent in September), with the knock-on effect being a continued trend of risk aversion, making cash and bonds the most popular asset classes to invest in right now.”

The survey questioned 727 RaboDirect customers who had investment accounts in December 2011. It found that the lack of confidence in the global economy was affecting investors’ view of the value to be found in the global stock market, with optimism declining to 52 per cent compared with 56 per cent in September, and 71.8 per cent last December.

Cash is the top asset class, followed by shares and bonds.

Emerging markets remain popular with investors, with 41.4 per cent favouring them (with Asia at 32.3 per cent and Europe at 14.4 per cent).

The global property market was also losing favour among investors, with confidence falling from 14.2 per cent in September to 8.8 per cent in the latest survey.