Latest / Early Edition with Ryan Bridge / Chris Tennent-Brown: ASB Senior Wealth Economist on investor confidence dropping to the lowest level since Covid

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Chris Tennent-Brown: ASB Senior Wealth Economist on investor confidence dropping to the lowest level since Covid · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So investor confidence has slumped back to pandemic levels and
• 0:03
  Speaker 1: ASB survey out this morning shows confidence it's just one
• 0:07
  Speaker 1: percent for quarter two of twenty twenty five. That's the
• 0:10
  Speaker 1: lower since twenty twenty though we're still well above the
• 0:12
  Speaker 1: negative twenty five percent seen. Then, half of investors say
• 0:15
  Speaker 1: they're very worried about global issues hurting returns. ASB Senior
• 0:20
  Speaker 1: wealth economist Chris tinant Brown joins me, Now, thanks for
• 0:23
  Speaker 1: your time, Chris.
• 0:24
  Speaker 2: Oh, good morning, Thanks for having on.
• 0:26
  Speaker 1: So why is confidence so low? What's impacting it?
• 0:30
  Speaker 2: I think there's two or three things going on. One
• 0:33
  Speaker 2: is that offshore uncertainty. Investors are feeling a bit rattled
• 0:38
  Speaker 2: by what they're seeing overseas, but it's important to also
• 0:42
  Speaker 2: note that that hasn't necessarily translated into bad investment returns
• 0:46
  Speaker 2: for people that are invested in global markets. The other
• 0:50
  Speaker 2: things are the housing market I think is surprising many
• 0:54
  Speaker 2: that it hasn't picked up the way you'd expected with
• 0:57
  Speaker 2: all the reductions and mortgage rates that we've seen. And
• 1:02
  Speaker 2: there's a bit of mirroring of the weakness we're seeing
• 1:05
  Speaker 2: in consumer confidence within this investor confidence survey as well,
• 1:09
  Speaker 2: with people just not that confident in the overall economy
• 1:13
  Speaker 2: and outlook.
• 1:14
  Speaker 1: Is confidence different around the country.
• 1:17
  Speaker 2: It is. It's interesting to see that confidence in Auckland
• 1:23
  Speaker 2: is the highest area, whereas the Lower North Island, which
• 1:29
  Speaker 2: of course includes Wellington, is the lowest, even though a
• 1:32
  Speaker 2: lot of the drivers are similar across these areas. But
• 1:36
  Speaker 2: again we see the same thing in consumer confidence. Wellington
• 1:39
  Speaker 2: consumer confidence is weaker than Auckland consumer confidence at the moment.
• 1:43
  Speaker 1: Okay, were they any areas we're confidence did lift?
• 1:48
  Speaker 2: Yeah? I think the one thing that's really pleasing is
• 1:51
  Speaker 2: that confidence in managed funds is holding up and likewise,
• 1:58
  Speaker 2: with key we save us. So hopefully, although people are
• 2:00
  Speaker 2: feeling rattled by those global events, they're not chopping and changing,
• 2:05
  Speaker 2: and if they've stayed the course through the first half
• 2:07
  Speaker 2: of the year, they will have seen a recovery from
• 2:11
  Speaker 2: those April jitters, and I think that's helping the mood
• 2:16
  Speaker 2: for investors that are using those products.
• 2:19
  Speaker 1: Chris, how do we do deal with that disconnect that
• 2:21
  Speaker 1: you mentioned there before, whereby you know, we have this
• 2:23
  Speaker 1: lack of confidence and investment in marketing, but actually investments
• 2:26
  Speaker 1: are doing quite well.
• 2:28
  Speaker 2: I think the key thing there is it just highlights
• 2:31
  Speaker 2: the importance of getting advice when you're feeling nervous and
• 2:36
  Speaker 2: sticking with well thought out plans. People are saving for
• 2:39
  Speaker 2: retirement with key we Favor, for example, this won't be
• 2:42
  Speaker 2: the last time that we see a bit of global
• 2:44
  Speaker 2: volatility influencing the mood. But if people stay the course,
• 2:49
  Speaker 2: hopefully they'll be able to achieve their longer term goal.
• 2:52
  Speaker 2: So I think that importance of getting advices is highlighted
• 2:55
  Speaker 2: by the survey.
• 2:56
  Speaker 1: What impact does low investor confidence have on the economy?
• 3:00
  Speaker 2: I think the first places in the housing market at
• 3:04
  Speaker 2: the moment. Housing is very important for key we psyche,
• 3:09
  Speaker 2: So for people that are investing in the property market
• 3:11
  Speaker 2: and they're seeing houses go house prices go sideways, it
• 3:16
  Speaker 2: contributes to this lower level of activity that we're seeing
• 3:18
  Speaker 2: in the housing market. For other areas of the economy,
• 3:24
  Speaker 2: hopefully people just carry on using products like managed funds
• 3:28
  Speaker 2: and key we Savor for their longer term savings goals.
• 3:32
  Speaker 2: So the other area of the economy which is impact
• 3:36
  Speaker 2: I think is the overall picture of these lower interest
• 3:39
  Speaker 2: rates that we've got within the economy.
• 3:41
  Speaker 1: Yeah, I mean, it's not hugely helpful for the government,
• 3:43
  Speaker 1: isn't it When they're focuses on economic growth and investment.
• 3:47
  Speaker 2: That's that's that's right. I mean, the confidence is so
• 3:52
  Speaker 2: important for activity, particularly when you're looking at consumer confidence
• 3:57
  Speaker 2: and invest in business confidence. For investor confidence, I think
• 4:02
  Speaker 2: when we see it at these sorts of levels, it's
• 4:05
  Speaker 2: just really important for them for individuals and then in
• 4:08
  Speaker 2: turn for the overall economy, for people just to stick
• 4:10
  Speaker 2: with those longer term plans that they've got.
• 4:12
  Speaker 1: Yeah, no panicking. Can we predict when we're going to
• 4:15
  Speaker 1: see investor confidence improve?
• 4:18
  Speaker 2: I think it's going to vary from asset class to
• 4:21
  Speaker 2: asset class. If people have got housing as there as
• 4:24
  Speaker 2: their main investment, and that's why they're feeling low at
• 4:27
  Speaker 2: the moment, then we should see monetary policy work. We
• 4:31
  Speaker 2: think the housing market will eventually pick up. It's just
• 4:34
  Speaker 2: taking longer than it would normally expect it times like now,
• 4:40
  Speaker 2: and for things like Keyy, Savor and managed investment funds,
• 4:45
  Speaker 2: I hope that those that those returns just keep on
• 4:49
  Speaker 2: slowly boosting confidence and and and people pick up somewhat
• 4:53
  Speaker 2: from the from the doldrums that we've been in at
• 4:56
  Speaker 2: the moment.
• 4:56
  Speaker 1: In the Slates survey, Chris, thanks so much for your time.
• 4:59
  Speaker 1: That was ASP Senior Wealth economists Chris Tenant. For more
• 5:03
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