New research by Chartered Accountants Australia and New Zealand (CA ANZ) has revealed that half of those surveyed are likely to increase the scale of their investments in the next 12 months despite inflation and global political unrest.
The latest CA ANZ Investor Confidence Survey also confirmed the importance of independent auditors in giving retail investors confidence in the face of uncertain economic and political times.
“In tumultuous economic and political times, investors are looking for a clear, reliable view into their investments and they trust independent auditors’ reports to assure this view, alongside financial analysts, stock exchanges and government regulators,” said CA ANZ Reporting and Assurance Leader, Amir Ghandar FCA.
“The survey shows that retail investors are overall more confident than last year, in both domestic and overseas capital markets, and importantly, Australia’s own publicly listed companies. Interestingly, confidence in the ASX topped the reasons driving their optimism.
“The percentage of investors with ‘some or more’ confidence in domestic capital markets jumped four points to 87 per cent, ahead of a still healthy 78 per cent of investors who expressed some or more confidence in overseas capital markets.
“Confidence in domestic publicly listed companies was still higher, with 90 per cent of respondents expressing some or more confidence, up five points on last year.
“Fifty-four per cent of respondents said they would increase their investment in the next 12 months, compared to just seven per cent who said they would scale back. Improvement in personal finances was the top reason for optimism, with confidence in the ASX not far behind.
“Of course, this is a survey of mum and dad investors who are looking at macro trends, rather than day traders whose confidence might bounce between rock bottom and sky high in a day, or an even hour.”
“Overall, we can see that retail investors have confidence in the markets, and the protection that independent auditors deliver.”
That said, inflation is seen as the biggest risk to the economy and is the main driver for those expressing a lack of confidence in Australian capital markets. Added to that, confidence in the Australian Government has declined as a driver of confidence in Australian Capital markets.
“It’s notable that 90 per cent of responding investors have confidence in audited financial reports, because audit is the unsung hero when it comes to assuring reliable and trustworthy information to businesses, investors, journalists and market observers.
“While Reddit’s wallstreetbets and various discord channels may be the source du jour when it comes to investing, it’s audited financial reports that provide the bedrock for good decision making.
“The challenge for auditors is to make their reports more accessible, through improved digital reporting, so that retail investors can be more informed, whether investing locally or globally,” concluded Mr Ghandar.
Now in its sixth year, the survey ran from 12-27 June 2024 and was completed by more than 1,000 Australian retail investors mostly holding more than $10,000 on the share market, in addition to other investments such as managed funds, property and superannuation portfolios.
Developed in association with the Center for Audit Quality in the United States, the survey provides a window into how retail investors are feeling about capital markets, publicly listed companies, financial reporting and audit, and the groups who look after their interest. It also provides insight into topical issues like sustainability reporting, digital reporting, and the impact of changes in financial reporting.
ENDS
About Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand represents more than 139,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action.
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For more information contact:
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AUSTRALIA Gillian Bowen, Public Affairs Manager Australia M +61 411 485 421 gillian.bowen@charteredaccountantsanz.com
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