Tuesday 20th May 2014
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Public confidence in New Zealand's financial markets is growing, particularly among middle-income earners, according to a survey by the Financial Markets Authority.
Of the 1,015 people surveyed, 59 percent expressed overall confidence in financial markets, up from 54 percent in last year's survey, according to the Colmar Brunton poll conducted on behalf of the FMA. Middle-income earners' faith in markets rose to 69 percent from 56 percent.
Sharemarket activity has been buoyed by the government's partial privatisation of electricity companies MightyRiverPower, Meridian Energy and Genesis Energy, and a further sell down of Air New Zealand while growing KiwiSaver funds have stoked demand for equities.
"The fact those earning between $50,000 and $100,000 per year are a lot more confident points to broader participation in share markets and financial markets more generally," said Rob Everett, chief executive of the FMA. "This reinforces the increasing importance of KiwiSaver, as people watch their balances grow."
Some 75 percent of those surveyed held some kind of investment, a slight increase from last year's 72 percent. Of those who invest, 61 percent were confident in the markets, a gain from 58 percent in 2013 and of those without investments 52 percent were confident, compared to 41 percent in 2013.
The NZX 50 Index, New Zealand's benchmark index, has been one of the best performers in the Asia-Pacific region year-to-date, advancing 9.2 percent, compared to a gain of 1.1 percent for Australia's S&P/ASX 200 Index, while Hong Kong's Hang Seng Index's fell 2.6 percent and Japan's Nikkei 225 Index dropped 14 percent.
Under the new Financial Markets Conduct Act 2013 investment material must be simpler and easier for retail investors to understand. According to the survey, of those with investments 53 percent said investment information received was helpful in making an informed decision about investing.
"With increasing confidence in the infrastructure and its regulation we'd hope people become more confident about participating in the markets while understanding that markets move in cycles and positive outcomes are not guaranteed," Everett said.
This is the second year the authority has surveyed the public.
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