Current and Future Investor Sentiment Index hits record high

The latest BOV Asset Management Investor Sentiment Index results show that investors are optimistic vis-à-vis current and future prospects. The current index reading now stands at 101.46, while the future sentiment index has reached 103.22, both hitting record highs since the first reading in 2017.

During a breakfast meeting, Joseph Camilleri, Executive Head at BOV Asset Management said: “The investment sentiment index, which is now in its 4th wave, addressed a gap on the local market, serving as an important tool to both investors and practitioners, on how to gauge investor sentiment in Malta.”

Conducted by MISCO International, the annual index is conducted via telephone interviews among local investors. The latest reading was the result of more than 600 interviews spread between male and female respondents.

“The latest exercise shows that the Maltese investor continues to have a clear preference for local investment but this time round within a balanced investment environment,” elaborated Mark Vella, Head BOV Asset Management. “Since the last reading, investors moved towards having a mix of local and foreign investments, and a balanced stance of attaining income and growth concurrently, rather than the more conservative stance which resulted in previous results.”

A closer look at the profile of the Maltese investor as projected through this survey shows that the Maltese investor is more optimistic when compared to the last results. This might be the result of the performance of the foreign financial markets in 2019.

The latest results show that 49% of Maltese investors hold investments in government stocks, 39% hold investments in equity, and a 24% holding in local corporate bonds. Following the drop experienced in the 2018 findings, the number of persons holding government stocks increased once again in 2019. On the other hand, the number of persons holding investments in funds decreased in 2019 when compared to 2018, and the number of persons holding investments in equities increased.

Vella mentioned that personal pension plans, property, local corporate bonds and single premium investment were added to the list of investment types respondents could select from.

Investors were asked their preferred investment channel with the vast majority (75%) of Maltese investors continuing to use banks as the main channel through which they invest. Various types of intermediaries (financial consultants, stockbrokers) were mentioned by 23%, while 8% stated that they either invest online or on their own. Both the current and future investment sentiment show that investors consider property as the best investment, with close to 40% claim property is the best investment option.

In his closing remarks Peter Perotti, Chief Officer Funds Business, said: “The BOV Asset Management Investor Sentiment Index showed that 77% of respondents do not have a monthly investment plan”. He pointed out that this is very high and that practitioners in the industry should focus more on how to grow this area, aimed at the younger generation planning for their own future financial stability. Perotti also noted that it will be very interesting to follow future readings and how the results will evolve over time.