S'pore investors upbeat on markets: survey

[Musicwhiz]

Another possible sign of exuberance?

Business Times - 26 Jan 2011

S'pore investors upbeat on markets: survey

By GENEVIEVE CUA

SINGAPORE investors are optimistic about markets and returns, as a newly launched investor sentiment index shows, and they are likely to take a more aggressive stance in their investments.

JP Morgan Asset Management yesterday launched the JP Morgan Investor Sentiment Index, which it believes is a first here. The index is based on a half-yearly survey, the first of which was conducted in December. The index has been launched in other Asian markets since 2006.

Andrew Creber, the firm's business head, is hoping the index will be 'a sustained and useful barometer of investor sentiment in Singapore'.

The maiden reading for the index for January is 134, which reflects 'strong levels of optimism'. The result is largely driven by 80 per cent of investors expecting the Straits Times Index to rise in the next six months.

There were about 500 respondents, with annual incomes of more than $60,000 and five years of continuous investment experience.

The survey consists of six questions relating to an increase in the STI; the economic environment; market environment; global economic environment; appreciation of personal portfolio; and an increase in investments.

The major findings were that 63 per cent of investors expect a better economic environment; 67 per cent expect a better investment market; and 66 per cent expect their personal portfolios to appreciate.

Ninety-one per cent of investors believe the Singapore economy has recovered from the global financial crisis. The top three factors leading to recovery were the goverment's monetary policies, the recovery of global markets and of real estate markets.

Two-thirds of respondents expect the job market to improve. But 86 per cent of investors also expect inflation to grow by an average 4.3 per cent by the end of June, mainly due to the price of oil, housing and food.

Some 44 per cent aim to be more aggressive in their investment strategy over the next six months while one third plan to make some asset allocation shifts. ' . . . investor risk appetite is increasing. We expect to see continued potential in emerging market related investments as growth in these markets is set to outstrip growth in the developed world,' said Mr Creber.

[arthur]

One of those useless index for investors but good for stock brokers to solict biz.
The US equivalent would be the Michigan consumer confidence survey. Doesn't work well. It can't be used as contrarian sentiment gauge either.
cheers.

[kazukirai]

Michael Maboussin made an assertion in his book 'More than you know' that I thought was very interesting. I don't have the book with me anymore but I think the idea was that Markets are 'efficient' or at least closest to being efficient or fairly priced as long as there are diverse enough opinions i.e Enough bulls and bears at the same time. It's when you have most people on only one side of the fence which is where you see the market overshooting to the upside or the downside.

So having said that, I can only guess when they polled or tabulated their results but that probably explains, in part, why the market picked up towards the end of last year. Where it leads to is another story. This survey is probably useless by now.

[Musicwhiz]

I did note that most of the time, when the majority of people expect something to happen in the stock market, it usually turns out otherwise.

[koh_52]

1st half Market Outlook

Looking ahead, 2011 may turn out to be an even better year. Investors have turned more optimistic about the economic and earnings outlooks for this year. Most managers are more positive on equities compared to bond, and they are bullish on bourses in Asia and Emerging market. They are also sanguine on the commodity sector which should benefit from the robust growth in Emerging economies like China and India.

However, looking back over the past 12 months, we know that it is not wise to throw caution to the wind. Investors should not let their guard down altogether and they must be ready for volatility and even sharp pullbacks in the markets this year as headwinds, like the European debt crisis continues to loom on the horizon and will resurface from time to time.

Nevertheless as we saw last year, volatility and pullbacks can also present opportunities for those with a stronger risk appetite and a medium term horizon.