Index tracks sharemarket sentiment

New Zealand investors can now quantify investor sentiment down to how others are feeling about specific sharemarkets.

AUT University’s Auckland Centre for Financial Research has launched its Finsent Sentiment index, which reports weekly on investor sentiment about the New Zealand and Australian sharemarkets, and currencies.

Recent data shows a drop in sentiment across most measures except the New Zealand dollar against the Australian, where sentiment has barely moved.

Research officer Alex MedlandSlater said that although theory viewed markets as generally efficient, that was not the case.

‘‘Investors are irrational at times, which affects the movement of markets. You generally can’t measure how a market is ‘feeling’ unless you ask investors, quantify the results and then combine this information into an index.’’

ASB has also released its latest investor confidence survey, which shows investors becoming more cautious.

The quarterly report reveals net investor confidence has fallen to +19 per cent net positive in the three months to September (Q3) from +23 the previous quarter (Q2) and from the two-year high of +25 in the first quarter of the year (Q1).

Despite the dent in investor confidence, the level is still well above the low of +3 per cent seen at the start of 2016. –Stuff