Aust shares show good short term future

TheAustralian Investors’ Association(AIA) and Adviser Ratings August survey of investor and adviser sentiment has flagged a positive shift in mood regarding the Australian share market.

This month’s survey recorded the highest number of bulls, while recording the lowest ever number of fence sitters and bears.

The report says these figures indicate a rising number of people prepared to buy, and if there is a relationship between investor sentiment and market performance the prospects for the share market in the coming months are very positive.

AIA and Adviser Ratings predict positive investor and adviser sentiment will see Australian shares show significant increases in value over the coming six months.

Of advisers surveyed, 72 per cent were bullish, compared with 54 per cent of bullish investors. Advisers made up 25 per cent of the neutral camp, while investors were more sceptical at 41 per cent. However not even 2 per cent of advisers ranked as bearish, and a similarly small number of investors, at just over 4 per cent.

The survey also reported that while financial advisers continued to be more positive than investors, even that gap was narrowing.

From August last year, the advisers surveyed have increased in bullishness from 48 per cent to 72 per cent, with the lowest point hitting 32 per cent in October last year.

Only 25 per cent of advisers are taking a neutral view this August, compared to 46 per cent in 2002, while this figure peaked at 55 per cent in October last year, corresponding with the drop in number of bullish advisers.

The number of bearish advisers at 1.8 per cent is a considerable drop from the figure of 15 per cent in February this year, and also lower than the mark of almost 5 per cent last August.

Investor sentiment has peaked this month at 54 per cent, almost double the figure this time last year.

However many investors continue to sit on the fence with 41 per cent labelled neutral, as compared to 48 per cent last year.

Investors are harbouring a much more positive outlook towards the Australian share market however, with only 4 per cent bullish compared to 21 per cent last year, and 35 per cent in February this year.