Investors are bullish about increasing their exposure to the Australian sharemarket, despite the low-growth conditions affecting economies and share markets world wide, according toMacquarie Margin Lending.
In surveying its clients Macquarie found that just under 90 per cent of investors said in September, although notably before the terrorist attacks in the US, that they would increase their level of gearing over the next 12 months. This compares with 49 per cent in May 2001, and 63 per cent in May 2000.
Investor sentiment about shares being considered a better asset class than any other was also up, with 668 per cent of investors believing this to be the case. This followed a low point in May of this year where 62 per cent were of this view, which had dropped 6 per cent from 12 months before.
Macquarie Margin Lending head Scott Young says the investors apparent faith in Australian shares could be related to the perception that the Australian share market is more resilient than other bourses around the globe at this time.
“The fact that the Australian market is relatively stable compared to offshore markets, and the fact that there is some good value around have probably contributed to investors showing these high levels of confidence,” he says.
Young also says that margin lending is becoming more popular among investors who want to manage risk better.
“Gearing is becoming a more acceptable strategy because people want to manage risk. Risk is something people should not be afraid of,” he says.
Young could not give exact figures on the number of investors and amounts of money invested through Macquarie Margin Lending, but said the number approached about 10,000 investors who have a combined investment of a figure approaching $1 billion.
