Rental property tops investor confidence survey as optimism grows: ASB

Monday 20th July 2009

Rental property reclaimed its top slot in ASB’s latest confidence survey, which showed investors became less negative in the second quarter amid signs the global economy may be over the worst of its slump.

New Zealand investors confidence improved to -11% from -25% in the latest three months, the first pick-up in the measure since the third quarter of 2008, according to a report from ASB. Some 18% of those polled said rental property offers the best return, up from 15% three months earlier. Bank savings slipped to second place at 17%.

The NZX 50 Index has climbed 16% from its low in early March, mirroring gains in U.S. benchmark indexes as investors bet on a return to economic growth by the end of the year. The Chicago Board Options Exchange’s Volatility Index, or VIX, a measure of volatility on the Standard & Poor’s 500 index that is sometimes referred to as Wall Street’s ‘fear gauge,’ fell 1.2% to 24.34, the lowest reading since the week leading up to the collapse of Lehman Brothers.

Equity markets began to recover in March “as a sense that the global recession wouldn’t get much worse started to take hold,” said Jonathan Beale, ASB’s head of investment services. “This ‘could have been worse’ factor has no doubt contributed to the growing drop in pessimism seen over the quarter,” he said.

Investors are awaiting second-quarter earnings results in New Zealand, which start to flow in earnest in August. Results are already pouring out in the U.S., where Goldman Sachs Group, Intel Corp. and IBM all posted better-than-expected results for the three months ended June 30, bolstering risk appetites as the global economic outlook improves.

ASB’s survey showed managed funds didn’t rate highly in the latest quarter, falling 1% to 9%, though confidence in such funds rose in June.

Confidence in KiwiSaver picked up, with the percentage of respondents deeming it adequate to cater for their retirement rising 3 points to 23%. Most still saw the need for some form of supplementary support.

Details of how the survey was taken weren’t immediately available.

Businesswire.co.nz

Comments from our readers

No comments yet