The Financial Markets Authority (FMA) of New Zealand has published its annual Investor Confidence Survey this Thursday, showing that despite recent heightened volatility brought on by COVID-19, investor confidence has remained steady.
In fact, the survey from the market regulator shows that market confidence has stayed within a similar range for the third year in a row, which is particularly surprising given the effects of the coronavirus pandemic on the stock and trading markets.
The survey, which was conducted between the 5th and 14th of May 2020, when New Zealand was in Level 3 lockdown, two-thirds of investors (66 per cent) were confident in the country’s financial markets. Last year, this figure was 65 per cent.
Not only did investor confidence increase, albeit slightly, but the proportion of investors who were very confident in the country’s financial markets was also actually at an eight-year high, coming in at 10 per cent.
Furthermore, this year, the percentage of investors stating they didn’t know about confidence in the markets decreased from 15 per cent last year down to 8 per cent. As highlighted by the FMA, this indicates that New Zealanders are taking more interest in the markets.
FMA survey shows an increase in regulation confidence
The survey, which is based on the response of 1,003 New Zealanders, also asked about how confident participants were about market regulation. For this, confidence rose by 60 per cent year-on-year, reaching 68 per cent in 2020.
According to the regulator, this sharp uptick in confidence has been driven by a steep increase in confidence levels among KiwiSaver investors over the last two years. In particular, confidence has risen from 56 per cent in 2018 to 67 per cent in 2020.
Commenting on the results, Rob Everett, FMA Chief Executive said in the statement: “It’s pleasing to see confidence remaining steady over the past 12 months given the market conditions.
“Further, the level of confidence in regulation shows people are reassured that New Zealand is a good place to invest their money, and that there are protections for investors.”
For the survey respondents who increased their investments in the past 12 months, the most popular were buying shares or managed funds, the survey showed. Confidence scores across the survey were highest for those with these investment types, the FMA said in the statement.