S’pore investor confidence at two-year low: Survey

SINGAPORE — The confidence of Singapore investors has sunk to a two-year low because of a combination of falling oil prices, the collapsing Russian rouble and a weaker global economy, said a survey released yesterday.

The JP Morgan Investor Confidence Index, which was based on the half-yearly survey, fell eight points to 113 last month, the lowest reading since December 2012, when it was at 106.

The survey of 509 respondents conducted by JPMorgan Asset Management (JPMAM) in the last quarter of 2014 also showed that proportionately more investors are shunning Singapore asset classes. About 53 per cent of investors said they planned to put funds in the category over the next six months, down seven percentage points from June last year. Instead, more of them — 32 per cent, versus 28 per cent previously — are favouring Asia-focused assets.

On the global economic outlook, 32 per cent of respondents — an increase of 11 percentage points — expected that it would worsen over the next six months.

“It was not surprising to see investor confidence somewhat shaken in the last quarter of 2014, given some of the developments affecting financial markets that resulted in greater volatility. The fall in oil prices, the rouble devaluation and a relatively sharp (market) correction in October seemed to have an impact on the confidence of investors,” said JPMAM Singapore CEO Steven Billiet, who presented the findings.

Given these concerns, investors now favour capital preservation over capital gains — a reversal from the findings of the previous survey.

Despite the pessimistic outlook, the proportion of investors who plan to increase their investment amount remained the same, at 46 per cent.

This showed that overall risk appetite has not significantly dampened and that investors are monitoring external developments to see if the outlook may improve, said Mr Billiet.

With the uncertain global outlook, more investors prefer to diversify their risks across different asset classes. For instance, multi-asset funds, which comprise asset classes such as bonds, equities and real-estate investment trusts, now account for 28 per cent of investors’ mutual fund portfolios, up from 20 per cent previously, the survey found.

This healthy trend should be encouraged to help investors navigate the market volatility, said Mr Billiet. “If you’re a bank or financial adviser, you are definitely going to recommend your client to be in this type of flexible multi-asset-type product because that gives you the best chances of having a client who is not in any way overexposed to something that will possibly get a negative outcome.”