Shareholder confidence is stabilising after a shaky second quarter, with a majority of investors expecting the market to improve regardless of what happens in polling booths next month.
The GPS-Melbourne Institute Shareholder Confidence Index fell 0.3% to 108.8 in August, following a 10.5% fall in May.
Current shareholder confidence fell 4.3% to 108.3 while but expected confidence improved 3.9% to 109.2. The indices are based on a quarterly survey of 1000 shareholders across Australia.
Shareholder buying intentions improved in all sectors besides metals and minerals, telecommunications, utilities, and IT. Significantly more participants plan to buy consumer discretionary, energy and financial shares this month than in May.
GPS managing director Maria Leftakis said that many investors were reluctant to support sections of the resources sector that were struggling to raise capital.
“We think that investors will keep their hands in their pockets for some time yet, despite the escalation of small cap raisings as juniors and some mid-caps face existential threats from lack of funds,” she said.
Only about a third of investors said they would wait for the outcome of the September 7 federal election “before making any important investment decisions”, while 58% said the election did not affect their decision-making and 9.6% were unsure.
A majority of respondents (53.3%) said they were concerned about insider trading, an issue that has has made headlines recently as ASIC considers sitting in on analyst briefings to stamp out selective disclosure of information.
Investors were also asked if they were concerned “about the creation of dark pools through high-frequency trading” to which 23.7% said they were concerned, and 34.8% said they were unaware of dark pools.