Investors prefer property and retirement planning rather than holding equities
Results of the sixth Investment Sentiment Index, which was conducted by Misco International, were presented by BOV Asset Management at a business breakfast earlier this week.
In his introductory speech, Simon Azzopardi, Chief Wealth Management Officer at Bank of Valletta, said that “the index, now in its sixth year, gives us a better view of what are the main preferences of the local investors, making it easier to tailor-make investment products based on the needs of investors.”
Thanking Misco for their sterling work, Mr Azzopardi added that “we are committed to conduct this research on an annual basis, thereby enabling all key players to keep abreast of investor sentiment and take action as necessary.”
Mark Vella, Head Business Development and Support Wealth Management, gave an overview of the research, which is based on the feedback of over 600 investors from across Malta and Gozo. A quarter of the sample constituted of 18 to 34 year-olds, 34% aged between 35 and 55 and the remaining 41% were investors aged 56 years and older.
The sentiment index remains consistent with previous results, namely that Maltese investors have a clear preference for local investment, whilst a balanced approach, as opposed to a more conservative or aggressive approach to investment is preferred by the Maltese investor.
Since the last index there were some key changes as the number of persons having a personal pension plan and holding investments in property continues to increase. It must also be noted that this time round the survey shows that the number of investors holding equities is on the decline. It also seems that financial intermediaries are becoming a stronger channel for investments.
Mark Vella said that “when asked which they consider to be the best type of investment at the moment, just under two-fifths of individuals (38%) claimed that it is in property, followed by government stocks (24%). Moreover, 36% of investors believe that property will remain the best type of investment in the next 12 months.”
The sentiment towards the current investment market has increased when compared to scores achieved in 2021. In 2022 a mean score of 5.33 on a scale of one to ten, with one meaning very negative and ten meaning very positive was attributed to the local market, in comparison to 5.12 in 2021. A tenth (10%) of respondents stated that the current situation is not good given the decreasing interest and income, whereas an additional 8% still consider the global pandemic to be leaving an unfavourable effect on the investment market.
Forward looking to the next 12 months, the sentiment for the local market increases to a mean of 5.77 compared to the mean score of 5.12 achieved in 2021. Although an increase is noted, figures are still relatively lower than pre-pandemic numbers. Again, this is mainly due to the current situation with just under a tenth (9%) of individuals attributing less optimistic views to the global pandemic and 6% of investors claiming high levels of uncertainty and doubt.
The current sentiment for foreign investment increased to 5.48 in 2022 when compared to the mean score achieved in 2021 of 4.88. The current sentiment for foreign investment is also reflected in the level of confidence in the following 12 months, with a mean score of 5.73, compared to the 4.92 score achieved in 2021.
The current index reading, which started at 100 in 2017, is at 93.46, and increase of 4.3% from the last reading whilst the future index reading is up by 13.5% since the last reading, currently at 96.09.
Speaking at the end of the presentation, Mark Agius, Executive Head, BOV Asset Management, thanked Lawrence Zammit and the research team at Misco. “Investment has become an integral part of the financial services offering by BOV Group and the BOV Asset Management Investor Sentiment Index is today an important tool for all financial services stakeholders to better understand the market, while helping us to design investment solutions that address better market demand,” said Mr Agius.
Participants at the business breakfast included BOV officials, stockbrokers, and representatives from local insurance companies.
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