Irish investors less optimistic about economic revival
New research from TD Waterhouse, UK stockbroker that recently launched a dedicated online equity trading service in Ireland (tdwaterhouse.ie), reveals that Irish investors are less optimistic about the economy than their UK counterparts, with under a fifth (18%) of those surveyed saying they think the Irish economy is recovering compared to 42% who believe Ireland is in a depression.
These are just some of the findings of the TD Waterhouse Investor Confidence Survey for 2009. Now in its fifth year the fully independent research is conducted to gauge current investor sentiment and confidence for the future, and this year TD Waterhouse has opened up the survey to gather the opinions of over 500 Irish investors for the first time.
Other findings show that despite the less than optimistic views on the Irish economy, 38% of Irish investors surveyed said they felt more confident in the performance of the Irish stock market today compared to 12 months ago - with 44% rating the poor housing market as a key driver of stock market investment. The most widely held shares are in Irish companies (65%) but many investors also hold shares in international companies (52%). Overall, nearly half (48%) of the investors surveyed are satisfied with the performance of their portfolio over the past 12 months.
The research also revealed that the sectors expected to perform best in the next few months are the Drugs and Healthcare sector (56%), the Energy and Mining sector (40%) and the Banking sector (30%). Of the international markets Irish investors expect to perform best, the Asian stock market was the most popular choice (21%), followed by the US stock market (17%) and the European stock market (10%).
Looking back over the past 12 months Irish investors rated Banking (21%), Drugs and Healthcare (14%) and Energy and Mining (11%) as their best performing stocks. However, it is interesting to note that 38% of investors also noted the Banking sector among their worst performing stocks for 2009, followed by Property (20%) and Insurance, IT and Telecommunications (5% respectively).
INVESTOR CONFIDENCE - IRELAND AND UK COMPARISONS
The TD Waterhouse Investor Confidence Survey for 2009 also inlcuded over 1,000 UK investors and this has resulted in some noteworthy comparisons between Irish and UK investor sentiment - as noted below.
While 42% of the Irish investors surveyed believe the Irish economy to be in a depression, just over a third (37%) of UK respondents believe the UK economy is currently in recovery mode. Interestingly, 36% of both Irish and UK investors believe their respective economies are in a double-dipped recession. Ultimately in the UK, only 20% of investors feel the UK is in a depression.
Meanwhile, more than half (55%) of Irish respondents say they have adopted a more cautious approach to investing in the past 12 months (this compares to 45% of UK investors) and just under half (48%) are satisfied with the performance of their portfolio during the same period (compared with 60% of UK investors).
Given current market and economic conditions, it is perhaps unsurprising that the biggest cause for concern for next year among Irish investors is the security of their job (41%) followed closely by their ability to save for retirement (40%). In comparison, although job security was the biggest cause for concern in the UK in 2008, this year it has been superseded by the ability to save for retirement (39%), with job security now the second major cause for concern (35%).
Commenting on the results, Angus Rigby, CEO of TD Waterhouse said: "We are delighted to include the opinions of Irish Investors for the first time this year and it has certainly provided us with some interesting insights into investor sentiment and the key investment drivers in Ireland.
"While the survey clearly shows that Irish investors feel that there is still some way to go before they'll see any sign of an economic revival in Ireland, it is encouraging to note that they have still managed to be prudent with their investment decisions and continue to make profits despite adopting a cautious investment strategy this year. General stock market volatility has certainly provided opportunities for Irish investors and it is also encouraging to see that many of those surveyed are willing to look overseas for their investment opportunities, with expectations that the Asian stock market will outperform other markets in the coming months."