Investor confidence in global economic outlook falls further

Irish investors are significantly less bullish about the global economy during the current quarter, according to results of the latest RaboDirect Investor Barometer (RIB). The survey of RaboDirect investors reveals a significant deterioration in confidence in the global economy with 44 per cent of respondents saying they are optimistic about the prospect for the global economy over the next three months, compared with 64 per cent who were optimistic in April 2010. Only 19 per cent of respondents now say they are optimistic about the Irish economy, down four per cent on April. Despite a significant drop in confidence in the global economy, investors continue to see opportunities internationally with 66 per cent believing there is value to be found in the global stock markets over the next three months (April, 72 per cent). Results indicate that investors' optimism about their financial situation has dropped to 68 per cent compared with 75 per cent in the first quarter. Increased apprehension in the current market is reflected in investors' preferred asset classes with 40.7 per cent indicating a preference for cash, 33.5 per cent preferring equities, 22.7 per cent preferring bonds and 3.1 per cent opting for property. In particular, confidence in the Irish property market continues to fall, with 95 per cent of respondents indicating they are pessimistic about the current market (April, 90 per cent). A deterioration in sentiment is also evident when investors look further afield, with 81 per cent indicating they are pessimistic about the outlook for global property over the next three months (April, 77 per cent). Killian Nolan, investment manager at RaboDirect, said: "Despite a 20 per cent drop in investor optimism for the global economy, perceived value in global stock markets has held up to a large extent with two out of three of respondents continuing to see opportunities in the global markets. This is reflected on the ground with investors increasingly opting to invest in funds targeting regions with strong recent growth, such as China, India and Latin America. "Unsurprisingly - given current economic uncertainty - we continue to see increased interest in funds that focus on gold mining companies. One such fund, the BlackRock World Gold Fund, has been among our top five most popular funds consistently over the last six months." While 37 per cent of investors surveyed rank costs and fees as the most important factor when choosing an investment provider, investors remain cautious about how their investments are managed with 35 per cent citing honesty and transparency as factors most important to them. RIB, RaboDirect's quarterly investor barometer, has been designed to assess investment sentiment and levels of confidence among Irish investors on a quarterly basis as the Irish economy continues to cope with the challenges of market turmoil.