Investor confidence is down sharply in a new survey, however there is more optimism when it comes to the performance of New Zealand's capital markets than those overseas.
Four per cent of New Zealand retail investors, surveyed as a part of a Chartered Accountants Australia New Zealand (CA ANZ) survey, had a "great deal" of confidence in New Zealand's capital markets (IE the New Zealand stock exchange).
A further 21 per cent had quite a bit of confidence.
When asked about the level of confidence they had in capital markets outside of New Zealand, three per cent had a great deal of confidence and 15 per cent had quite a bit of confidence.
The survey was conducted between June 10 and 15. It saw more than 500 retail investors, with more than $10,000 invested in shares (in addition to investments in superannuation or managed funds, and property) surveyed.
CA ANZ chief executive Ainslie van Onselen said the pandemic, turbulent market conditions around supply chains, inflation and rising interest rates had put investor confidence "on the ropes".
Last year 36 per cent of those surveyed were either very or quite confident in New Zealand capital markets (11 percentage points more than this year). Whereas 34 per cent were very or quite confident in capital markets overseas (16 percentage points more than this year).
All the major indices around the world have sunk, following a long bull run.
The S&P/NZX 50 has fallen 14.2 per cent over the past year.
The S&P/ASX 200 is down 10.0 per cent; the S&P 500, 8.8 per cent; the New York Stock Exchange Composite, 10.5 per cent; the Nasdaq Composite, 20.0 per cent; and Shanghai Stock Exchange Composite is down 7.1 per cent from a year ago.
The 1000 retail investors CA ANZ surveyed in Australia, at the same time it conducted its survey in New Zealand, were also more optimistic about capital markets in their own country versus those abroad.
However, they were much more confident across the board.
Thirty-nine percent of Aussie investors were either very or quite confident in their capital markets (compared to 25 per cent in New Zealand).
Meanwhile 24 per cent were confident in capital markets outside of Australia (compared with 18 per cent in New Zealand).
When it came to crypto-assets, 24 per cent of respondents in Australia were either very or quite confident, whereas only 11 per cent in New Zealand could say the same thing. Rather, 47 per cent of respondents in New Zealand said they had no confidence at all in investing in crypto.
While market conditions affect confidence, van Onselen believed improving the way companies and providers of investment products use digital tools to report to their investors would help.
"That's why CA ANZ has been pushing for mandated, consistent digital reporting, as well as simplified reporting overall, to enable a better view into company performance and prospects," she said.
CA ANZ explained, "Digital reporting enables customised infographics, tables, and graphs to present data in an easily understandable fashion. A common language is used to 'tag' each item being disclosed, making it machine-readable, consistent and quick to navigate."
Asked, "To what extent would you support making digital financial reporting mandatory in order to increase the availability of this information?" 16 per cent of New Zealand respondents were strongly supportive, 46 per cent supportive, and 33 per cent indifferent.
Asked, "To what extent do you expect the availability of more customised, digital financial reporting would improve your ability to access financial information?" 42 per cent said there would be some improvement, 33 per cent there would be quite a bit of improvement, and 10 per cent said it would be greatly improved.
"A substantial majority of retail investors see today's financial reports as overly complex and difficult to understand," van Onselen said.
"Investors need a clear view out the front windscreen to make well-informed, considered decisions, so that they can keep their finances on the road."