RaboDirect’s Investor Barometer, which measures sentiment among Irish investors, reached an all time high in January having entered positive territory for the first time. The overall index now stands at 100.8, up from 86.9 in September 2012. (Zero to 100 signals a negative sentiment and 100 to 200 signals a positive.)
Results show that confidence among Irish investors in both the national and global economic outlook has increased dramatically with 55% now confident about the outlook for the Irish economy over the next three months compared with 37% in September 2012. Meanwhile, confidence in the global economy has seen an even more marked rebound with 64% of respondents expressing confidence in the global outlook over the next three months (34% were confident in September 2012).
Despite this increased confidence in the economy, however, optimism among investors about their financial situation over the coming three months was down slightly at 74% compared with 76% who were optimistic in September.
Investors are becoming increasingly more favourably disposed to the global stock market with 80% saying they see value to be had in stocks compared with 72 per cent in September. This positive sentiment was reflected in investors’ preferred asset classes with 51 per cent indicating a preference for equities (Sept 2012: 41%) while 25% preferred cash (Sept 2012: 33%), 20% preferred bonds (Sept 2012: 21%) and only 3% preferred property (Sept 2012: 5%).
The emerging markets remain the region where most investors would consider investing (42%), followed by the USA (20%), Europe (19%) and Asia (19%).
“Irish investor confidence is much more upbeat at present having stabilised somewhat in 2012,” says Killian Nolan, Investment Manager at RaboDirect. “While there are still many challenges ahead for the global economy, uncertainty is now less of a factor and this is evident in the increasing numbers of investors looking at equities as an asset class, particularly in the emerging markets. That said, ongoing austerity measures in Ireland are taking their toll in terms of how investors view their personal finances, but this is understandable just after December’s budget.”
The RaboDirect Investor Barometer results for January 2013 are based on the responses of 413 RaboDirect customers who had investment accounts as of January 2013.