SINGAPORE investors are optimistic about markets and returns, as a newly launched investor sentiment index shows, and they are likely to take a more aggressive stance in their investments.
JP Morgan Asset Management yesterday launched the JP Morgan Investor Sentiment Index, which it believes is a first here. The index is based on a half-yearly survey, the first of which was conducted in December. The index has been launched in other Asian markets since 2006.
Andrew Creber, the firm's business head, is hoping the index will be 'a sustained and useful barometer of investor sentiment in Singapore'.
The maiden reading for the index for January is 134, which reflects 'strong levels of optimism'. The result is largely driven by 80 per cent of investors expecting the Straits Times Index to rise in the next six months.
There were about 500 respondents, with annual incomes of more than $60,000 and five years of continuous investment experience.
The survey consists of six questions relating to an increase in the STI; the economic environment; market environment; global economic environment; appreciation of personal portfolio; and an increase in investments.
The major findings were that 63 per cent of investors expect a better economic environment; 67 per cent expect a better investment market; and 66 per cent expect their personal portfolios to appreciate.
Ninety-one per cent of investors believe the Singapore economy has recovered from the global financial crisis. The top three factors leading to recovery were the goverment's monetary policies, the recovery of global markets and of real estate markets.
Two-thirds of respondents expect the job market to improve. But 86 per cent of investors also expect inflation to grow by an average 4.3 per cent by the end of June, mainly due to the price of oil, housing and food.
Some 44 per cent aim to be more aggressive in their investment strategy over the next six months while one third plan to make some asset allocation shifts. ' . . . investor risk appetite is increasing. We expect to see continued potential in emerging market related investments as growth in these markets is set to outstrip growth in the developed world,' said Mr Creber.