Investor appetite for shares grows
Investors are more inclined to invest new savings in shares and managed funds than they were a year ago, according the latest ING/Melbourne Institute Household Savings and Investment Report released today.
The research, which involves data sourced form 1,200 randomly selected households, revealed that 9.5 per cent of survey respondents would consider investing new savings in shares, the highest figure since March 2002.
The findings were supported by the Australian Stock Exchange (ASX) yesterday, with the ASX chairman Maurice Newman stating that 45 initial public offerings since July 1 and strong volumes are indicative that the market is in a buoyant stage.
Despite the perceived rosy outlook for shares, the latest savings and investment report suggests that real estate regained lost ground to retake its mantle as the most common destination for new savings.
Also the ING/Melbourne Institute study found that investors are becoming less risk averse, with households also easing back on their inclination to repay debt.
In the September quarter, there was a sharp fall in the proportion of respondents intending to use new savings to repay debt (21.6 per cent) compared to the June quarter (26.6 per cent).
Meanwhile allocations to managed funds were also up with 6 per cent of those polled aiming to invest new savings in managed funds compared to the 4.9 per cent in the previous September quarter in 2003.
In addition, the proportion of survey respondents intent on investing new savings in real estate rose to 26.5 per cent - the first rise since March 2003.
ING Australia executive director Ross Bowden says the apparent increased confidence levels towards less risk averse investing is consistent with stable share markets and continued low interest rates.
“As markets continue to remain stable, investors become more confident and will slowly increase their exposure to shares and property either direct or through managed funds.
“Continued low interest rates and low unemployment may also be a factor behind the return of interest in property,” Bowden says.
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