Investor sentiment in S'pore hits two-year high

INVESTOR sentiment in Singapore has shot up to a two-year high, according to a quarterly survey released by Dutch bank ING yesterday.

Local investors are confident that the worst is behind them and are poised for more market action in the coming year, the survey found.

Market players here are bullish on the prospects in the first quarter of this year despite tepid confidence in the United States economy.

Investor sentiment has returned to pre-crisis levels, the global financial services group noted in the study.

The survey's Singapore sentiment index soared 168 per cent to 150 for the fourth quarter last year from a grim 56 a year earlier at the height of the crisis.

The fourth-quarter 2009 figure was an all-time high since the study was introduced in the third quarter of 2007.

ING commercial banking's Asia research head and chief economist Tim Condon said: 'Investor confidence has settled at a high level after storming back in the second and third quarters last year, when Singapore investors revised their expectations after realising that the worst-case scenario likely would not happen.'

He added that economic growth here this year will be considerably higher than last year's, with a rise of 2 per cent to 4 per cent on a quarter-on-quarter basis throughout the year.

Investor sentiment in Singapore was also among the highest in Asia, after the high-growth markets of India and China, and Taiwan.

The study's pan-Asia index showed modest quarter-on-quarter growth of 3.5 per cent from 142 in the previous three months, reflecting confidence in the stability of the global recovery.

Local investors are also more confident about job security, as sentiment regarding the economy remains high. A total of 19 per cent said the economic situation has had a positive impact on their job security, compared to 8 per cent in the previous quarter.

The export sector is also expected to rebound. Singapore's recent export rally has been due mainly to China and the rest of Asia, and it is well-positioned to benefit as the world recovery broadens and the major economies reassert themselves as export destinations.

Investor sentiment may also be boosted by the opening of the integrated resorts and a feel-good Budget ahead of a possible general election this year, added Mr Condon.

The ING survey measures and tracks investor sentiment and behaviour of mass affluent investors from 12 Asia-Pacific markets each quarter. It is done by research firm The Nielsen Company.

Source: Straits Times, 28 Jan 2010.