Investor sentiment in Singapore has rebounded in the third quarter despite the uncertainties of the Eurozone debt crisis, continued slowdown in the US economy and the potential threat of ‘currency war’, according to the Dashboard Survey released by global financial services group ING Investor.
Singapore’s investor sentiment in Q3 rose 5 percent to 147, up from 140 in the previous quarter, driven by improved returns on investments and personal financial situations.
The overall pan-Asia ING Investor Dashboard Sentiment Index, excluding Japan, rose 7 percent to 146 in Q3 from 136 in Q2. According to the report, investor confidence continued to remain positive for six consecutive quarters, and increased 100 percent from the 73 percent that was recorded by the Index in Q4 2008.
Singapore’s investor sentiment ranks as 5th place in Asia for the third quarter, behind India, the Philippines, Thailand and Hong Kong. This was attributed to more investors’ views that their returns on investments and personal financial situation have improved in the past three months, and more investors are expecting that these factors will continue to improve in the next three months.
Investor sentiment in Hong Kong, China and Thailand, on the other hand, show the biggest quarter-on-quarter jump in the third quarter. China’s investor sentiment index jumped 13 percent to 143 in Q3 from 127 in Q2, and ranked 7th place among the Asia markets, excluding Japan.
“Investor confidence in Asia has bounced back from Q2 2010 despite worries about a hard landing in the US as concerns about the Eurozone debt crisis from the previous quarter have dissipated slightly. A rush of money is also coming into the emerging markets in Asia from investors seeking more attractive yields and this has helped to drive positive sentiment. In Singapore, the most salient point for investor confidence is the buoyancy of the local housing market and some of that buoyancy was removed with several rounds of cooling measures being implemented,” said Tim Condon, head of research & chief economist (Asia) at ING Commercial Banking.
“Southeast Asia emerging markets have outperformed the region largely because markets such as Thailand, Indonesia, the Philippines and Malaysia are less integrated with China as compared to North Asia, and coming out of the financial crisis, their good economic fundamentals have insulated them from overheating concerns about China’s economy, making them “super performers” in the region,” added Mr. Condon.
While investor outlook in the country strengthens and risk appetite improves, the property market outlook will soften due to the recent cooling measures.
“Singapore investors’ outlook on the stock market strengthens for Q4 2010 while the outlook on the property market softens following several rounds of cooling measures introduced by the government in 2010. Overall investment risk appetite also improves,” said Mr. Condon.
“The stock market continues to perform well with the banking and property sectors doing well. While Singapore’s economy continues to grow strongly with our GDP forecast for 2010 remaining at 13%, a main concern is asset price overheating in the market and there might be a need for a fourth round of measures to curb the property market to keep asset price inflation in check.”