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NZ Investor Confidence Rallies Despite Bleak Outlook

Fuseworks Media
Fuseworks Media

Wellington, July 15 NZPA - Investor confidence in New Zealand rallied over the previous quarter despite investors predicting inflation and the economy would continue to deteriorate over the next three months.

In the latest ING Investor Dashboard Survey, 9 percent of New Zealand investors spoken to had increased confidence in the previous quarter.

Seventy one percent expected inflation to continue to worsen and 53 percent were concerned the New Zealand economy would continue to deteriorate.

ING New Zealand investor services manager Steven Giannoulis said this was the "unique perception" of New Zealand investors compared to investors from the 12 other Asia-Pacific countries involved in the survey.

India remained the most confident with a 3 percent decrease from the first quarter, Hong Kong jumped into second with a 15 percent increase and China dropped from second to third with a 14 percent decrease.

Japan remained the least confident despite a 21.7 percent increase.

New Zealand ranked eighth, up two spots from the first quarter thanks to the 9 percent increase and just below Australia who moved from 11th to seventh place with a 18 percent increase in investor confidence.

Mr Giannoulis said the survey results reflected the inflation figures released today by Statistics New Zealand.

Inflation was up to 4 percent in the June year, the Consumer Price Index (CPI) leapt 1.6 percent in the June quarter and food prices (FPI) rose 8.2 percent in the year to June.

"New Zealanders have a strange she'll be right-type attitude," Mr Giannoulis told NZPA.

He said the CPI and FPI figures would not be a surprise to anyone and would not have a significant affect on investor confidence.

Mr Giannoulis said New Zealand investors remained concerned about the impact of the global credit crunch, rising inflation and volatile markets on their personal investment portfolios.

"We believe many investors will potentially take a wait and see approach to investments and just sit on the sidelines with their money."

New Zealand investors continued their "conservative" approach to investment in the Asia-Pacific region with 42 percent seeking low-risk long-term capital preservation and 48 percent a balanced strategy approach.

Mr Giannoulis said New Zealander investors favoured "traditional well-developed nations", but the last few surveys showed they were starting to invest in places like China, particularly after the free trade agreement.

He said despite the increase in confidence New Zealand investors were still largely neutral and the time of the survey, in early June when the sharemarket had started to rally, and the fall in the previous quarter should be taken into account when looking at the figures.

"The unique perception of New Zealand investors is demonstrated in their expectations for the future in terms of returns on investment and improvements to their personal financial situation, which appear more positive than their overall feelings about the economy."

Investors in New Zealand and Australia were "pausing to see how the global economy performs while local markets adjust", Mr Giannoulis said.

The ING survey involved face-to-face or online interviews in the 13 countries with a total of 1313 investors with disposable assets or investments of $US100,000 ($NZ132,661) and above, or $US56,000 and above in Indonesia.

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