Investor Intent

Australian investors are only mildly optimistic about the growth prospects of the domestic share market in the first part of 2008.

The latest CoreData Investor Sentiment Index reveals investors have only a ‘tepid’ collective intent to slightly increase their weighting to shares between January and March 2008.

The index, which measures attitudes towards the various asset classes and broader sentiment on related issues on a quarterly basis, reflects investor caution four weeks out from a Federal Election and given the talk of further interest rate rises before Christmas.

From a sample of more than 700 weighted investors, 30.1% of investors expect domestic equities to perform only ‘somewhat better’ in the first quarter of 2008 compared to the final quarter of 2007.

23.9% expect the market to perform ‘somewhat worse’, while 28.8% believe performance will be no better or worse than the present period.

A minority of 2.7% and 2.1% of investors expect the market to perform ‘much better’ and ‘much worse’ respectively in the first part of 2008.

In terms of putting their money where their mouths are – or ‘not’ in this case given the outlook is not perceived to be overly bright, only 13.2% of investors plan to increase their weighting to Australian shares, while 23.9% are neither more or less likely to increase allocations to the asset class.

5.7% are less likely to add to their portfolio in the first quarter of 2008.