Maltese investors prefer property and retirement planning rather than holding equities, according to the sixth Investment Sentiment Index, which was presented by BOV Asset Management at a business breakfast last week.
Simon Azzopardi, chief wealth management officer at BOV, said in his introductory speech that “the index, now in its sixth year, gives us a better view of what are the main preferences of the local investors, making it easier to tailor-make investment products based on the needs of investors”.
Thanking Misco International for the research they conducted, Azzopardi added that “we are committed to conduct this research on an annual basis, thereby enabling all key players to keep abreast of investor sentiment and take action as necessary”.
Mark Vella, head business development and support wealth management, gave an overview of the research, which is based on the feedback of over 600 investors from across Malta and Gozo. A quarter of the sample constituted of 18- to 34-year-olds, 34 per cent aged between 35 and 55, and the remaining 41 per cent were investors aged 56 years and older.
The sentiment index remains consistent with previous results, namely that Maltese investors have a clear preference for local investment, while a balanced approach, as opposed to a more conservative or aggressive approach to investment, is preferred by the Maltese investor.
Since the last index, there were some key changes as the number of persons having a personal pension plan and holding investments in property continues to increase. It must also be noted that, this time round, the survey shows that the number of investors holding equities is on the decline. It also seems that financial intermediaries are becoming a stronger channel for investments.
Vella said that “when asked which they consider to be the best type of investment at the moment, just under two-fifths of individuals (38 per cent) claimed that it is in property, followed by government stocks (24 per cent). Moreover, 36 per cent of investors believe that property will remain the best type of investment in the next 12 months”.
The sentiment towards the current investment market has increased when compared to scores achieved in 2021. In 2022, a mean score of 5.33 on a scale of one to 10 ‒ with one meaning very negative and 10 meaning very positive ‒ was attributed to the local market, in comparison to 5.12 in 2021.
A tenth (10 per cent) of respondents stated that the current situation is not good given the decreasing interest and income, whereas an additional eight per cent still consider the global pandemic to be leaving an unfavourable effect on the investment market.
Forward looking to the next 12 months, the sentiment for the local market increases to a mean of 5.77, compared to the mean score of 5.12 achieved in 2021. Although an increase is noted, figures are still relatively lower than pre-pandemic numbers. Again, the research shows that this is mainly due to the current situation with just under a tenth (nine per cent) of individuals attributing less optimistic views to the global pandemic and six per cent of investors claiming high levels of uncertainty and doubt.
The current sentiment for foreign investment increased to 5.48 in 2022 when compared to the mean score achieved in 2021 of 4.88. The current sentiment for foreign investment is also reflected in the level of confidence in the following 12 months, with a mean score of 5.73, compared to the 4.92 score achieved in 2021. The current index reading, which started at 100 in 2017, is at 93.46, an increase of 4.3 per cent from the last reading, while the future index reading is up by 13.5 per cent since the last reading, currently at 96.09.
Speaking at the end of the presentation, Mark Agius, executive head, BOV Asset Management, thanked Lawrence Zammit and the research team at Misco.
“Investment has become an integral part of the financial services offering by BOV Group and the BOV Asset Management Investor Sentiment Index is today an important tool for all financial services stakeholders to better understand the market, while helping us to design investment solutions that address better market demand,” Agius said.
Participants at the business breakfast included BOV officials, stockbrokers and representatives from local insurance companies.