Every six months we interview Kiwis to determine two things:
how confident are they in terms of the outlook for investing – both in the financial sector and also property, and
to what extent to they trust the players in the financial sector – banks, finance companies, share brokers etc..
The results show that Kiwi investor confidence in the financial sector has slumped since February this year.
With a net negative confidence rating of -56%, a significant decline from the net negative rating of -44% in February, it shows that Kiwi investor confidence in the financial sector is still very fragile. Recent events like that South Canterbury Finance; talk of a double-dip recession in the USA; and the regular stream of negative stories out of the Euro-zone, I believe are reflected in this drop in confidence.
As is often referred to, Kiwis have more confidence in housing as an investment option, and this is reflected in our most recent results – in fact confidence, whilst it’s still negative, is less negative than six months ago.
In February Kiwis rated their confidence in housing investments net negative -47%, and in September -29%. I would put this largely down to a matter of timing. Back in February people knew there were planned changes to the tax regime for property investment, however the details and understanding was patchy and in the absence of the “full picture” they took a pessimistic view towards the likely impact of those changes to the tax regime.
Since then, some six months later, people now know what they are dealing with ... perhaps some feel the changes aren’t as bad as they had expected, or perhaps they now have strategies to deal with them.
In terms of who people trust the most, and this is obviously music to my ears, banks continue to be the #1 industry group within the financial sector that Kiwi’s trust the most (we measure trust by asking people to rate the quality of products/services; whether the providers act with integrity; if they have they good quality knowledge; and if people believe their money is safe with that provider). Banks came out with a net positive score of 48%, up from 43% in February.
Finance companies are once again the least trusted with net negative -16%, insurance companies get a stable positive rating, and those in the investment management and advice part of the market return weak confidence ratings.
Banks also scored the highest in terms of where people would be investing their money in the next six months. 58% said they’ll be putting money into a cheque or current account, and 29% into an On Call or Term Deposit.
Other more topical subjects we measured were (the answers to which are in the presentation below):
whether people felt they’d be better off from the GST and personal tax changes
if they people believed they’d be better off, what would they do with the extra money
do people understand, trust and/or refer to credit ratings, and
if the level of regulation a good thing.
For the full details of the results please take a look at the presentation.
You can also review our media release, and comments from the media (NZ Herald and TVNZ – NZI Business).