KEY POINTS:
The confidence of high net worth New Zealand investors has plummeted by more than 20 per cent over the last four months, an ING survey has found.
The quarterly survey questions more than 1300 investors across 13 countries in the Asia Pacific region with assets of more than
$100,000 on their current and future economic and investment sentiment.
Last quarter New Zealand was one of the few countries to show a slight improvement in confidence despite the US credit crunch and local problems in the finance company sector.
But the global economic problems now appear to have hit home with confidence falling by 23.7 per cent to a score of 90 out of 200 in the March questionnaire.
The biggest drop in confidence came from Singapore investors down 35.3 per cent, followed by Australia, down 32.1 per cent, and Hong Kong down 27.7 per cent.
Taiwan was the only country to see a significant increase in confidence, up by 26.5 per cent although its score remains in the lower half of the 13 countries.
Investors in India and China were the most confident while Japanese investors remain the least.
ING general manager of investor services Steven Giannoulis said confidence of investors in more developed markets such as Singapore, Hong Kong, Australia and New Zealand were being hit harder because of greater exposure to global shares.
The survey also revealed New Zealand investor intentions to move away from the US market, which has been hit by recession fears, and towards China and India.
Only 28 per cent of investors were considering investing in the US in the next three months, down from 49 per cent in the last survey, while 25 per cent were considering China, up from 17 per cent and 13 per cent were thinking about investing in India up from only three per cent.
"Amidst fears of a US recession, across the region there are fewer investors who plan to invest in the US market in the near future. This seems to have led to more investors looking towards Asia to ensure that they are operating diversified portfolios in an attempt to limit their exposure to individual market fluctuations," said Giannoulis.
He said the recently signed trade deal with China may also have highlighted the country's potential.
New Zealand investors also appear to be taking a more conservative approach with 47 per cent adopting a conservative investment strategy, up from 44 per cent in the last two quarters. Those taking a more balanced approach reduced from 50 per cent to 42 per cent while those taking greater risk through a growth strategy had increased from 7 to 11 per cent.
Giannoulis said cash and term deposits appeared to be the most popular option for investors followed by property and superannuation funds.
Around 100 New Zealanders were included in the survey.
